Agent Vs Agency

[ntbktrader]

I do P&C thru wholesalers as an individual agent and I am doing pretty well. I got lucky in that I am forced to buy E&O thru my broker dealer which just happened to cover P&C, along with life/health, and securities for $2400 a year.

I am probably going to be leaving that broker dealer to be more independent and was thinking about starting my own agency. I have an LLC set up and was wondering if I should get E&O on an agency basis or an individual basis. If I get E&O on an agency basis would people I hire have to buy E&O themselves or would the agency E&O cover it for them? Is the E&O going to cost a heck of a lot more on an agency vs agent basis? I have about 1 year experience in P&C personal lines and I keep hearing you need 3 years in order for your E&O not to be sky high.

Oh all this is in Dallas, TX..

If anyone has any other wisdom I will need I would appreciate it!

Thanks in advance

 

[Air Jer]

I have no idea on cost as I work in an agency and do not own it. However, agency E & O will cover everyone in the agency including secretaries and CSRs. Will you have staff? If so, you will be held vicariously liable for their actions as well as your own. The fact that you only have one year in the business in not a plus.

 

[Benefits Man]

1 year in biz is not good

 

[moeasadi]

Most broker/dealers do not allow P&C and securities businesses together.You probably need different entities and full disclosure.I had to quit my Waddel & Reed affiliation, because I was also doing P &C.This is Ca. It may be different in your state.

 

[workingsmart]

Hey ntbktrader, what broker were you with. How much commission where you getting paid?

I am curious because I am with Security Insurance and they pay me 12/12 on everything plus profit sharing. I have thought about going on my own but I feel like I got a pretty good situation with them.

 

[ntbktrader]

lincoln financial ..I get 70% of commish on securities

 

[kman]

Hey ntbktrader, do you mean 70% commission on first year life insurance, 70% of 4% on mutual funds (roughly 3%), or do you mean 70% commissions on P&C business? This forum deals with P&C, and I don't know of ANY P&C product with high commissions. Most are between 10% and 20% of annual premium, new business and renewal business. Lincoln Financial is life, annuity and variable life and annuity right?

 

[ntbktrader]

I said 70% on securities so lets say 100k investment, total commish might be 5% ..I get 70% of the total commish or $3500.

 

[jamis0n]

to the original question: get it for the agency, that way anyone connected to it is covered. You'll need to review the policy, of course... but generally employees and independent contractors are covered and the rating basis is gross sales.

 

[ntbktrader]

What is a good company to get E&O thru for life and health on an AGENCY basis?

Thanks