90,000 Bottle of Champagne
photo credit: Matthew Black
The Dallas Mavericks recently defeated the Miami Heat in the 2011 NBA Finals. While celebrating their victory, their owner, Mark Cuban, bought a $90,000 bottle of champagne for his players. He says, “It was worth every penny.”
Although he is most notably known for his passionate personality on the court during Maverick’s games, Mark Cuban is a rockstar in the venture capitalist and entrepreneur world.
He sold Broadcast.com to Yahoo! for $5.9 million in 1999 and is reported to be worth about $2.5 billion.
Like every other serious entrepreneur, Cuban had to take risks to get to where he is now and this is where we can help. If you are looking for venture capitalist liability policies, we can help.
If you have any questions about Venture Capitalist Insurance please click here or call us at 415-257-2100. Click here to learn more about Mark Cuban.
Becoming a millionaire in the smartphone industry and staying covered
photo credit: fairfaxcounty
One of the most exciting new entrepreneurial venues is the smart phone app industry. People are making incredible amounts of money by simply creating an application that is useful and entertaining for cell-phone users. It seems that almost anything you can think of has the potential to be made into an app. For example, they have Shazam (identifies music playing), video games, GarageBand, and countless other applications that people download everyday. Investors have serious opportunities to capitalize on the growth and popularity of an application. Obviously, you take a significant risk when you invest in something that has the potential to fail. Insurance is the way to minimize risk.
What is a Venture Capital Liability Policy?
This type of policy offers venture capital and private equity firms an effective, comprehensive way to transfer and mitigate many of
their most significant liabilities by combining four coverages into one policy:
-Management Liability Insurance
-Management Indemnification Insurance
-Outside Directorship Liability Insurance
-Professional Services Liability (Errors and Omissions) Insurance
Why should I buy it?
The Venture Capital Liability policy effectively addresses the needs of many types of private investment firms that manage other types of funds, including:
- Small business investment company funds
- Corporate-sponsored funds
- Fund of private equity/venture capital funds
- Distressed debt funds
- Mezzanine debt funds
- Government-sponsored funds
Are you a Venture Capitalist worried about possible liability?
Here’s what it is:
A Venture Capital Liability Policy offers venture capital and private equity firms an effective, comprehensive way to transfer and mitigate many of their most significant liabilities by combining four coverages into one policy.
For example:
- Management Liability Insurance
- Management Indemnification Insurance
- Outside Directorship Liability Insurance
- Professional Services Liability (Errors and Omissions) Insurance
What limits should you buy?
Many times there is no clear answer to this question. The goal is to purchase a reasonable amount of coverage based on operations and perceived risks.
Why should you buy it?
The Venture Capital Liability policy effectively addresses the needs of many types of private investment firms that manage other types of funds, including:
- Small business investment company funds
- Corporate-sponsored funds
- Fund of private equity/venture capital funds
- Distressed debt funds
- Mezzanine debt funds
- Government-sponsored funds
If you are interested in a Venture Capital Liability Policy click here!
Here’s what it is:
A Venture Capitalist Policy offers venture capital and private equity firms an effective, comprehensive way to transfer and mitigate many of their most significant liabilities by combining four coverages into one policy.
For example:
- Management Liability Insurance
- Management Indemnification Insurance
- Outside Directorship Liability Insurance
- Professional Services Liability (Errors and Omissions) Insurance
What limits should you buy?
Many times there is no clear answer to this question. The goal is to purchase a reasonable amount of coverage based on operations and perceived risks.
Why should you buy it?
The Venture Capital Liability policy effectively addresses the needs of many types of private investment firms that manage other types of funds, including:
- Small business investment company funds
- Corporate-sponsored funds
- Fund of private equity/venture capital funds
- Distressed debt funds
- Mezzanine debt funds
- Government-sponsored funds
If you are interested in a Venture Capital Liability Policy click here!
Business Travel Risks
It can be risky travelling abroad for business. According to Insurance Journal, Chubb Group of Insurance Companies conducted a study that revealed that due to terrorism risks business professionals will refuse business trips. They recommend employers take these precautions:
- Ensure the itinerary is confirmed and set in place
- Plan, research and map out all hotels, transportation and travel routes
- Provide employees with travel backup plans and communication devises
- Consider Business travel accident insurance
Health insurance, and workers comp may not protect your employees when they travel abroad. Additional travel insurance may be required, such as travel medical insurance, trip cancellation or delays, and baggage coverage insurance.
Learn about what fits your business best today by contacting us to review your policy.
Terrorism Insurance? You May Want It
As recent events of the death of terrorist Osama bin Laden, the U.S. government has heighten security warnings. Terrorism is a real threat to our daily lives and although, we should not live in fear, we should protect ourselves in ways that we can.
What is Terrorism Insurance?
Before September 2011, terrorism insurance for businesses was included in standard commercial business policy. However, according to Insurance Information Institute, this has changed to its own separate policy in order to better reflect the risks. Terrorism insurance can be obtained by private insurers or through the government Terrorism Risk and Insurance Act (TRIA), which was renewed until 2014, as it was designed to allow the insurance industry and federal government to share losses cause by an act of terrorism. Furthermore, qualified commercial insurers are required to offer TRIA coverage.
What it may include:
- Property damage to commercial buildings
- Business Interruption
- Workers Compensation
We would be happy to answer any questions you may have. Contact us today! Call us at 877-500-6997!
Workers’ Compensation Facts
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This year is the 100th anniversary of the workers’ compensation system. It has evolved and changed and now almost every state requires businesses to have workers’ comp insurance. It provides benefits to employees if they are injured on the job or become ill.
Why is it important?
Although required in most states, (yes, in California), it is important policy for the business and employees. It protects businesses from costly bills that can occur if injuries happen on the job. These injuries can be due to auto accidents, workplace violence, natural disasters, and occupational diseases and illnesses. Therefore, it can sometimes cover loss of wages and death benefits for employees.
If you want to learn more about the right workers’ comp policy for your business, feel free to contact us today.
Protect your Intellectual Property
It’s hard to ignore the latest news in pop culture. Everyone has been tuned in as we watch to see what Charlie Sheen will do next. From actor to instant Twitter star to a country tour, what will he do next? One of his recent ventures is in the attempt to copyright and trademark 22 phrases that have been buzzing. According to Business Insider this includes his now famous phrases such as, “Duh, Winning,” “Tiger Blood,” and “I’m not Bi-Polar, I’m Bi-Winning.” This might seem a little outrageous but have you been watching? Furthermore, the interesting thing is he has competition! It is reported that Jimmy Buffett wants tiger blood for a line of beverages. Only time will tell who will win, if anyone.
Anyways, what does this have to do with you and your business?
Charlie does have a point in obtaining copyrights and trademarks; it is a way to protect your intellectual property.
With cyber crime rising, it is important to reduce risk. Intellectual property protection will help you do that.
- Use legal protection to protect yourself and make sure you understand your rights
- Be knowledgeable
- Mark your intellectual property clearly for everyone to understand and see
- Require employees and contractors to sign non-disclosure, or confidentiality agreements
Your business cannot afford to ignore the risks. Protect yourself!
Is There a Substantial Unfunded Liability Lurking in Your Business Organization Documents?
By, Fred Waxler
Financial Strategy Specialist
When you executed your articles of incorporation, LLC documents, or your partnership agreement, you started your company on the road to success. The business has done well and you have many front- burner activities vying for your time and attention. Most likely, you’ve not given much attention to what your documents say since the day they were executed. So, when the unthinkable happens and your business partner meets an untimely death, aside from the staggering realization that your business life has changed substantially, you will now be forced into becoming intimately familiar with what those documents require in order to ensure the future financial viability of the business.
Assuming the attorney that originally drafted the documents did a thorough job, there will be a section that will lay out the required actions and financial responsibilities of the remaining principals. This is commonly referred to as a buy-sell arrangement or a corporate stock redemption plan and will stipulate what happens in the event of the death or disability of a principal of a firm. Under the terms of the agreement, the remaining partners or shareholders will typically have agreed to purchase the business interest from the decedent’s heirs for a stipulated price or a price derived from a previously agreed upon valuation formula.
After reviewing the documents, the next task is to write a check to the heirs. Where is the money going to come from? Will it come from retained earnings paid out over time on an installment basis? Will the company have to borrow the funds or mortgage assets to come up with the money? Will these methods have an adverse effect on the economic viability of the business? In order to cause the least drain on the business, the majority of buy-sell or stock redemption plans are funded with life insurance. Life insurance is considered the method of choice because implementation is straight forward, cost effective, and will deliver the appropriate amount of capital at the exact time it is required. It is, of course, important to make certain that the policy death benefits are kept consistent with the current valuation of the business so that the liability is not underfunded.
The incapacitiy of a principal is also addressed in a comprehensive buy-sell and disability buy-sell policies are available specifically designed to address this need. Because it takes three years of an entity’s earnings history be available before an insurance carrier will issue disability buy out policies, many times this coverage simply never gets implemented even though the life policies have been put in place.
For Further information please out CSI specialist:
Fred Waxler
fwaxler@costelloandsons.com
415-257-2120
