Contracting with a Local Agency for Commercial

[redsquash]

I'm meeting with a local P&C agency owner next week, to discuss if we can work together for commercial and group health insurance policies. I told him that I'll still be doing Life and Personal by myself. We will be sharing the commission for the clients I bring in for commercial.

I have been burned out VERY bad previously (by 800 pounds gorilla) so I'm little more concerned this time, about what agreement should I have with this local agency.

Can you guys suggest what should I MUST have, and 2) what should I try to get in terms of commission sharing % age, termination of contract with him etc etc. Any other comment/suggestion will be greatly appreciated.

 

[VolAgent]

Honestly, I'd save the money and do other marketing. Direct mail, telemarketing, seminars, anything but a tv or radio commercial unless you are prepared to do a lot of it.

But as to your question, I guess the commercial goes onto his book, and the group health onto yours?

This makes me think of something a client told me earlier this week, "All a contract is, is something I can review to remember the promises I made to you." You can have a great contract, but in the end the winner will be the attorneys if it gets ugly.

Just use something with clear and simple language spelling out what you expect of each other. Who pays for the marketing, how much of the commission you get, how often you review records to make sure everything is kosher, etc.

 

[redsquash]

oops, by Commercial - I meant Commercial property/liability insurance for business (not TV commercial or advertising).

I basically need the help of someone who is experienced in Business insurance. I do have access to the market, but I realize I need sometime before I can "skydive without instructor" for business insurance.

I'm thinking about splitting commission 50-50 or 60-40 (60 to me) for the clients I bring in. I will not get anything from his clients. When we split apart - I should be able to take all "MY" clients with me. This is my thought, dont know if this is practical or not? May be I have to give him some %age of the clients I bring in even after I split from "his agency". Thats the point I wanted to discuss here on this forum, as what should I expect from the contract in the real world, otherwise why would someone train me for being his own competitor.

Honestly, I'd save the money and do other marketing. Direct mail, telemarketing, seminars, anything but a tv or radio commercial unless you are prepared to do a lot of it.

But as to your question, I guess the commercial goes onto his book, and the group health onto yours?

This makes me think of something a client told me earlier this week, "All a contract is, is something I can review to remember the promises I made to you." You can have a great contract, but in the end the winner will be the attorneys if it gets ugly.

Just use something with clear and simple language spelling out what you expect of each other. Who pays for the marketing, how much of the commission you get, how often you review records to make sure everything is kosher, etc.

 

[Air Jer]

If you can get 60/40, go for it.

 

[moeasadi]

Do you mean 60% new-40% renewal?