Bringing on Sub-Agents

[padthaiforlunch]

A friend of mine is finally ready to leave Bankers'. Since he doesn't have the capital to start his own agency, he's asking about placing his license with mine. He will remain 1099.

I think I'm ok with this, but I am concerned about the potential liability. Currrently, I have my E&O with NAPA, and it covers me and my agency at 1m/1m.

So, couple of questions:

Do I need more coverage? If so, with whom?

He suggested he would give me 20% of what he brings in. Fair?

I need a contract for the arrangement. Anyone have on I can modify?

Thanks.

 

[somarco]

Check with your E&O carrier.

 

[Invain15]

what lines do you sell and what is he going to sell now.

 

[padthaiforlunch]

Licensed for Life and Health. His focus has been LTC and annuities.

 

[thereaper]

If he's a 1099 agent have him get his own E&O

 

[Invain15]

I would make him get his own. Do you have good GA contracts. If so most carriers will pay the person direct so that you don't even have to worry about the paperwork.

 

[somarco]

Sub-agents can drag you into their mess and your E&O may not cover it.

You don't want to get into advances either unless this is something you are going to do full time. That will come back to bite you.

 

[The Rabbi]

He has to be licensed with the company otherwise it sounds like he will be a 'blind agent'. His chargebacks are yours also. The company will pay him direct.

 

[padthaiforlunch]

I'll make him get his own E&O. But even then, I think I may need more coverage in case he eff's something up. Def. no advances.

No, I don't have a GA contract, but I every carrier I use, my corp. and I are both contracted.

Has anyone here brought another agent into their business?

 

[Todd King]

I have hired agents....DON'T 1099 him!! Let him contract under you but paid direct from the company. No percentages to figure, no renewals to keep up with, nothing but supporting him with your knowledge.
Unless of course you are planning on keeping his renewals and clients if he leaves and goes somewhere else...but you're not one of those type people now are you?