Leaving agency after 14 years

[mnmjski]

Hello everyone...This week I will be resigning from the agency I have worked for after 14 years of service as a sales person and have started a new agency. Focusing primarily on group health,dental,life and disability, I currently service over 70 commercial business accounts and do plan on taking them with me. I don't remember signing a non-compete and I am 99% sure I don't have one. The company has always said we own our block of business. I guess I'll find out shortly. My post is simply to ask what problems or pitfalls did anyone encounter during a transition like this. Leaving an agency and taking all possible business to the new company through BOR's. Any start up problems? etc.
Thanks

 

[HomeService]

I don't think the old agency is going to just sit back and let you do this- without a fight of some kind. Could be lawyers involved, maybe. After 14 years -I could imagine you have written quite a bit of business and have nice renewals- renewals that are of course in jeopardy of going bye-bye. Unless you have some kind of nice vesting deal. Sounds risky, but risk takers -often get rewarded nicely.

 

[somarco]

It really doesn't matter if there was a non-compete or not. Expect your former agency to send a strongly worded letter from their attorney. You can fight it, but expect the battle to be drawn out and expensive.

I fought one (against an MGU with deep pockets) over a dozen years ago and it cost me $20k. They sued me even though I did not take accounts, but they claimed the loss of business (almost 80% of the accounts I had written) was directly due to my action.

I prevailed, but it still cost me quite a bit.

 

[ABC]

If you did not sign a non compete then I think you are good to go. The fact that they said you "own your block"

I almost had to do what your going through.

Make sure you have your corporation set up with Tax ID numbers and proper insurance.
Talk to all of your carriers and find out how to switch the accounts. If you are the writing agent and just the commissions are going to the agency then it might be a very easy switch. Make sure you have all of your banking accounts set up since mosts carriers are doing EFT's.

If your current agency is the writing agent then your going to have to get your AOR's from each client. If this is the case it could take over a month to starting recieving your commission.

One thing to be aware of, if your forming new contracts with the carriers they might pay you lower commission due to production standards.

Good luck

 

[mnmjski]

Thank you for your responses. I feel bad since I have a good relationship with the owner, but it's time to make a name for myself. Kinda what I thought however, should be ok or I get sued. Any other thoughts, let me know.

Excuse the pun so close to Halloween, but kinda like walking into a haunted house...scared, but excited.

I'll keep all posted as to the outcome.

Great site by the way!!!

 

[Guest]

By law, they can't stop you from earning a living even if you signed a non compete, in most states.

I don't think it will cost you a lot in legal fees without costing them the same, so if you didn't sign anything, it may not even be worth it for them to pursue it.

Pray on it, and release it, see what happens. Don't make it your focus.

 

[somarco]

If you have never fought a former employer you have no idea what it will cost or where it will go. You do have a right to earn a living but not on their dime. They can claim infringement on goodwill, trade secrets, abuse of an employer-employee relationship . . . any number of ways to cry foul.

If you feel so strongly about it, why not ask your employer during the exit interview. Better to have an idea up front than worry about the other shoe dropping.

Another idea is, ask former employees who have left.

Turn it around. If someone worked for me for 14 years, and then thought they could leave and take accounts with them they would be sorely disappointed.

When you say commercial accounts I assume you are talking about P&C business. The P&C agencies I have dealt with in the past have all had pretty much the same arrangement.

You can take what you brought into the relationship but you must leave behind anything developed or house accounts you were allowed to service. New accounts during your tenure can be purchased based on a pre-determined formula.

Commercial accounts can pay a lot of bills. . . both for you and your former employer. Don't expect them to roll over.

 

[mnmjski]

The majority of my business is group health, life, dental and disability and I will be the first to leave and take business. Other agents have left or been fired, but never took their clients as they never really wrote much.

somarco
"You can take what you brought into the relationship but you must leave behind anything developed or house accounts you were allowed to service. New accounts during your tenure can be purchased based on a pre-determined formula."

That's the "thing", nothing was pre-determined, I never signed a non-compete and they always said I own my block. I expect them to be pissed and upset, but why would I pay for my business.

 

[The Rabbi]

That's the trouble with captive positions. They make money off your back for as long as you can stand it.

If they are decent people they should expect an agent to leave one day to go indie and appreciate all the money you've made them untill now. That's a risk they take in exchange for the override for as long as it lasts. If they aren't mature enough to understand then you will have trouble.

Plan your conversation so that you and they come out winners.

 

[moonlightandmargaritas]

Plan your conversation so that you and they come out winners.

Are you saying make it a win-win situation Rabbi?

How "clergy-like". Kudos.