Page 153 - The UnCaptive Agent

126 THE UNCAPTIVE AGENT

he was working as an agency manager in someone
else’s agency.
You see, the value in an insurance agency is the book
of business. And many inexperienced agency principals,
in an effort to avoid paying a salary to a producer, or
in an effort to recruit a producer to a relatively new
agency, are quick to give away ownership of the book of
business to the producer. When you do that, you make
that producer a partner and potentially a partner who
will own more of the business than you do. Don’t make
that mistake! The agency must own the book of business.
To make certain that this is clear between you and
your new employee (as well as to anyone else who
may become involved in a dispute, like a court), your
producers must sign a non-piracy and confidential-
ity agreement on their first day of employment. That
agreement should include a non-solicitation provision
wherein your employee agrees not to solicit your clients
should they leave your employment. Some people still
refer to these kinds of agreements as non-compete
agreements. But non-compete agreements are generally
considered to be against public policy and are therefore
unenforceable in every jurisdiction that I’m aware of.
You cannot prevent a former employee from engaging
in the insurance business and competing with you (as
the owner of their own business or as an employee of
someone else), but you can prevent them from solic-
iting or stealing clients of your agency. The only way
you can prevent that is to have them sign a non-piracy
agreement at the very beginning.

Paying the Producer

As we mentioned earlier in the chapter on tools, all
employees, including producers, must be employees.