First Contract Signing

[MikeMan]

Hey guys,
I am 23 and recently got offered a job to work for a family friends part owned insurance agency as a producer. I have been told how much money I could potentially make via renewals after 5+ years. However, I was informed that all of my clients would be essentially owned by the agency. That's when the question occurred to me, "what reason would you guys have to keep me after 5+ years?" For example, if theoretically I was making 80,000 after 6 years, what would keep them from replacing me with another guy making nothing and splitting a 60,000 pay raise with his partner? What would happen if they decided to sell the company? If I built up a huge client base after 10 years, I would still be powerless in negotiating any contract from that point forward because I do not own my own clients. My friend responded, that it was a great question, and it's something we could negotiate out in the contract. My family friends partner stated that his agency would never do something like that. How would I go about putting this in contract? Has anyone else been in this situation? What other questions should I ask? I'm new to insurance, so if you could simplify it down, that would be awesome.

 

[Josh]

The nature of the industry does tend to occasionally bring out the worst in people, but it's uncommon for them to fire a producer. One thing you could do is stipulate that any termination of employment must be for cause vs at-will. They could still find a reason to fire you, but it would have to actually be a reason.

 

[cm37]

I feel like you are going to have a hard time finding somewhere that you will actually "own" your book of business starting out. One thing you could ask about or negotiate is not signing a non-compete agreement so if you ever were to leave or get fired you could move over some of your clients with you if you you have a good relationship with them. They would still own it even after you left, but you could likely move some of it with you if you have done a good job.

 

[AZDave]

A good producer agreement allows for a fair 'buyout' after certain terms are met. It would also include an non compete....pretty standard practice.

 

[GInsGrp]

Your 23 I assume you are new to insurance. Unfortunately most of us had to lose accounts starting out. Take the job and learn the business. If you have any base hourly before commission that is the cost you have to accept. Unless you are bringing a book of business (i.e: at least $500'000 in premium)to the table why would the owner negotiate.