No Non compete, Starting own agency

[Joseph Anthony]

so to try and make a long story short, Ive been working for and independent agency with some direct appointments and mostly wholesale mga's. My book is reaching about a million and its time i start to get a move on starting my own agency.

Now when i started working the owner always told me that my accounts are mine to do what i want with ( at this time i had 0 clients and was struggling to bind)Now my book is just under 1mil and growing daily. So i have planed out mostly everything and am 100% ready to go out on my own. ive gotten the okay for a direct appointment with a major carrier as well as most of the MGAs i currently work with.

my book is 90% commercial and i should be able to BOR most of it to my new agency.

My main question and concern is.... If i have never signed anything and my boss tries to tell me i cant take my book is there anything they can do legally if i BOR most of my accounts ?


TIA

 

[DHK]

We just recently had a thread on this exact topic. Take a look at this and come back if you have anything more specific for your situation:

https://insurance-forums.com/community/threads/what-are-my-rights-as-a-producer.89641/#post-1196369

 

[marc82much]

so to try and make a long story short, Ive been working for and independent agency with some direct appointments and mostly wholesale mga's. My book is reaching about a million and its time i start to get a move on starting my own agency.

Now when i started working the owner always told me that my accounts are mine to do what i want with ( at this time i had 0 clients and was struggling to bind)Now my book is just under 1mil and growing daily. So i have planed out mostly everything and am 100% ready to go out on my own. ive gotten the okay for a direct appointment with a major carrier as well as most of the MGAs i currently work with.

my book is 90% commercial and i should be able to BOR most of it to my new agency.

My main question and concern is.... If i have never signed anything and my boss tries to tell me i cant take my book is there anything they can do legally if i BOR most of my accounts ?


TIA

If the broker fights you on it, it will be a problem. If he does not, things will be much better. Is most of your CL business with one company? Can you get appointed to this company? This is where the current owner can be a dick, he can tell you it is ok to take your clients, and then let the main company know that he does now want you to get a direct appointment. If he is a good (profitable) producer, this could complicate things.

 

[Joseph Anthony]

If the broker fights you on it, it will be a problem. If he does not, things will be much better. Is most of your CL business with one company? Can you get appointed to this company? This is where the current owner can be a dick, he can tell you it is ok to take your clients, and then let the main company know that he does now want you to get a direct appointment. If he is a good (profitable) producer, this could complicate things.

most of my business is between 2 carriers witch i have already spoke to and gotten the green light from. one being a direct appt the other an mga. I realize that i will not be able to be opened up by every MGA i work with now and will lose a little bit of business.But i feel as though i am doing my boss a HUGE favor by doing this now and not when my book is much larger.

im confident in getting the appointments as i have been building great relationships with my reps and underwriters.(knowing i was going to need this favor eventually)

Ill be having the conversation with my boss soon but im still worried about them possibly taking me to court afterwards.

 

[BADTROUT]

Legally speaking... for peace of mind you should seek an atty... but I can tell you from experience most states will advocate laws that empower your ability to pursue your chosen profession.

I will stress, those are THEIR clients until they are yours. You were compensated to solicit insurance on his behalf, so it will take action on your part through bor to make them your client.

That said, even the absolute best agent in your position may only convert 60 to 75% of that business, even if they don't actively try to keep it so don't get arrogant enough to think your great relationship with a carrier means an appointment, and because you were the salesperson, your clients will stay with you when you leave.

Lastly, the statement that you are doing your boss a favor by leaving now, versus when that book is bigger tells me you have much to learn...

How do I know all this? I've worn your shoes and walked your walk and like me, you'll take your lumps and learn your lessons, but in the end if you push hard, and keep at it relentlessly, you'll be just fine. Best of luck, and when in doubt BOR it, but do it on your merits, say nothing negative about where you are taking it from or you'll lose a good bit of that business.

 

[rousemark]

most of my business is between 2 carriers witch i have already spoke to and gotten the green light from. one being a direct appt the other an mga. I realize that i will not be able to be opened up by every MGA i work with now and will lose a little bit of business.But i feel as though i am doing my boss a HUGE favor by doing this now and not when my book is much larger.

im confident in getting the appointments as i have been building great relationships with my reps and underwriters.(knowing i was going to need this favor eventually)

Ill be having the conversation with my boss soon but im still worried about them possibly taking me to court afterwards.

Not taking a position as to whether you should or should not leave, but don't break your arm patting yourself on the back fooling yourself into the idea that you are doing HIM a BIG favor.. Is you stay and continue you build your book, he will get the overwrite on that business as it comes in and for as long as it stays which continues to compensate him for trouble and expense he went to bringing you on and training you.

All that aside, make an effort to leave n the most favorable circumstances possible by treating your GA in the same way you would want to be treated if the situation were reversed. Never unnecessarily burn a bridge behind you. You never know when the other person may be in a position to help you.

 

[VolAgent]

You are free to pursue your chosen carrier. That doesn't mean your boss has to hand you all your clients on the way out the door. He may fight to retain them, particularly the more profitable ones. He can also ruin your reputation behind the scenes with carriers, MGAs and COIs in your area.

You would do better to sit down and come to a mutually agreed upon exit plan. How much of the business are you going to take, will you pay an exit fee, etc. What is your boss going to do in terms of being a positive reference when speaking with carrier reps, etc.

 

[AZDave]

"Joseph, is that you? I need to see you in my office, NOW!"

Waiting for the day when a producer gets busted on this Forum! I'm sure it has happened...

I am just trying to picture how this conversation is going to go. That's a pretty good chunk of renewal income that this agency owner is use to getting. I can't see this going as a mutually agreeable departure.

Couple of thoughts:

How long will it take to get a producer code from your direct appointment and MGA? They may not consider getting the paperwork going until you are officially not producing for this agency. Need to prepare if that's the case.

Are you sure it only takes a BOR to get the client into your agency? Most of my carriers require BOR + full apps.

How are you going to contact your clients? Just because you do not have a producer contract doesn't mean you are entitled to taking proprietary information, such as account lists, and sensitive customer information.

As mentioned by others, seek advice from an attorney on the transition.

The day you have your meeting, be prepared to resign.

Best of luck to you!

Dave

 

[InsuranceVeteran]

This forum is fine to bring up the issue and get feedback on issues that other have faced doing the same thing, but it's foolish to come here and count on legal advise. What would you think of someone who asked for insurance advise from a stay-at-home mothers forum?

 

[BADTROUT]

I applaud anyone coming here for peer advice, there is a ton of knowledge to be gleaned... with a grain of salt. General consensus should never be mistaken for the advice of licensed legal counsel. Woe are those who assume.