Starting Job with Independent Agency...

[Scollywopbebop]

Like the title says, I'm starting employment as a 1099 agent with a big city/metro, local indy agency. They've asked me to sign a non-solicitation and a non-disclosure agreement. Is this a common practice? My only experience working as a producer has been through my step father's independent agency which is located in a smaller town (40k+ people).

This opportunity feels more in line with the "big leagues" whereas my last position felt like little league, in the sense that I didn't get much support and the opportunity for growth and compensation was virtually non-existent. Thank you for your time and responses.

 

[sunny1ib]

Yes, it is a commonplace request. My experience has been to read the non compete and non solicitation carefully as it typically contains language that states if you leave, you can't sell/do business as an independent agent within a certain radius of their office, the book of business you create and maintain belongs to them and does not belong to you, and tells you the duration of how long it lasts. Since you are questioning it now, I suggest you contact an attorney who specializes in employment law. States vary on non competes: are they accepted/valid, the duration, and how enforceable they really are.

Hope this has been helpful.

 

[tribetime32]

If you are signing things like that, I would be very careful! You are basically giving them license to sue you if things don't go well. What if you have to write a graded policy and they client can get level in 6 months. In that time a lot can happen. What if you went back with a different group and wrote that person a level policy, which is certainly in the client's best interest.

The aforementioned happens more than we would like to think and under that deal you are signing, you could likely be sued. You aren't truly independent if you have to sign a contract like that.

Good luck!

 

[Scollywopbebop]

Yes, it is a commonplace request. My experience has been to read the non compete and non solicitation carefully as it typically contains language that states if you leave, you can't sell/do business as an independent agent within a certain radius of their office, the book of business you create and maintain belongs to them and does not belong to you, and tells you the duration of how long it lasts. Since you are questioning it now, I suggest you contact an attorney who specializes in employment law. States vary on non competes: are they accepted/valid, the duration, and how enforceable they really are.

Hope this has been helpful.

Thank you for your insight. I think I will do well at this next place so I'm not very concerned with the non-compete at this time. I had a feeling that this might be a common thing, although it did feel a little personal lol.

 

[Markthebroker]

Like the title says, I'm starting employment as a 1099 agent with a big city/metro, local indy agency. They've asked me to sign a non-solicitation and a non-disclosure agreement. Is this a common practice? My only experience working as a producer has been through my step father's independent agency which is located in a smaller town (40k+ people).

This opportunity feels more in line with the "big leagues" whereas my last position felt like little league, in the sense that I didn't get much support and the opportunity for growth and compensation was virtually non-existent. Thank you for your time and responses.

I have nothing useful to contribute to this discussion, just that you have a fantastic profile name, and it would be awesome if you found yourself and equally clever avatar, you would be all set!

 

[Lawsonhj1]

Most people aren't concerned about non competes until they realize they want to compete.

 

[Warrior]

I had several years experience in selling insurance from a large captive agency. I had my own office I built, so when I quit to become an Independent Agent, I kept my office, but I had to start from scratch. Because I'm a small Mom and Pop agency, I didn't want to join a MIAA because they were so expensive. Because of my years of experience, I found an Independent Agency that allows me to keep my office, keep my business name, keep my clients. I have a 5 year agreement that I will use his appointments and build my agency. Once the 5 years are completed, I can get appointments with companies myself and take my clients with me, or renew my contract. If I leave before the 5 years are up, I pay him $30k or what my book is worth, whichever is greater. If he chooses to drop me before 5 years, he pays me the $30k or the book worth.
I pay him 15% of my commissions but I don't have to pay for my E&O, or CRM. He assists me when I need help with a quote and he gives great advice. I would not have signed with him otherwise because I work hard for my book and I do not want an agency just to take it. If I chose to leave after 5 years and get out of the insurance biz, I can sell to him or someone else.
Non solicitation agreement is saying you won't advertise to your clients you sold to at the agency, that you opened a new agency if you go out on your own for a specific amount of time.
When I was with the captive company, my non solicitation agreement was 12 months.
A Non-Disclosure agreement is simply legal contract between two parties (typically an employer and employee) restricting the sharing of confidential material, knowledge, or information with third parties.
So for instance, if you worked for State Farm, got fully trained and decided to quite a year later to work for Shelter insurance, you can't use State Farm's training materials, or their client lists, or prospect lists, or their forms etc. Or tell anyone State Farm secrets.

I do not agree with a contract that states I cannot open my own office and have my own Independent Agency and keep my clients I earned. I do agree about the Non-Disclosure. That protects the agency.

Some Independent Agencies are flexible with their contracts others is an all or nothing proposition.

My question to you is, before you sign anything, what are your goals for the next 3-5 years. Because it takes that long to build up a profitable book of business. If you say you want to eventually have your own office, then I would negotiate the contract. If you want to work under someone for your entire career, then sign the contract as is and go make your millions without overhead!

Good luck and Always Be Closing!