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Anchor Property & Casualty Insurance Co. Limited Producer Agreement


This review of Anchor Property & Casualty Company’s limited producer agreement exclusively focuses on major issues of concern to insurance agencies and does not address general contract issues or provisions of the contract that contain boilerplate language.

Items of Concern 

  • Provides that if MGA takes legal action against the Producer under the Agreement, the Producer must pay MGA’s attorneys’ fees and costs. 
  • MGA’s obligation to indemnify the Producer is more limited than the Producer’s obligation to indemnify the MGA.  

Provision-by-Provision Review

Structure corresponds to the lettered and/or numbered paragraphs of the contract (PDF).

Introductory Language: Limits the Producer’s authority under the Agreement to only those policies that Anchor has assumed from Citizens.

(2a) Provides that the MGA, in its sole discretion, may amend the Commission Schedule from time to time upon written notice to the Producer; however there is no advance notice period specified.

(6) Provides that if the Producer does not return Company supplies to the MGA/Company upon demand, the Producer shall hold the MGA/Company harmless of and from any liability and damages incurred by the MGA/Company as a result of the loss or disappearance of such supplies.

(7) Allows the MGA, in its sole discretion, to withdraw authority from the Producer, and no advance notice requirements are specified, unlike the termination provisions set forth in paragraph (15).

(8) States that the Producer shall be liable to the Company/MGA for any and all ensuing damages and costs (including attorneys’ fees) that may result if the Producer uses the Company’s name in advertisements without the consent of the MGA/Company.

(9) Provides that use, control, and ownership of expirations are deemed property of the Producer upon termination of the Agreement if the Producer is not in default of any accounts payable to the Company and has surrendered all Company supplies. However, this language does not set forth a dispute resolution or appeal process for the Producer to use in contesting the Company’s determination of a “default.”

(13) Specifies that the venue for any legal action arising under this Agreement shall be Sarasota County, Florida, and that if the MGA is required to take any legal action against the Producer under this Agreement, the Producer shall pay the MGA’s attorneys’ fees and costs. This obligation imposed on the Producer to pay the MGA’s attorneys fees seems to be imposed on the Producer regardless of the ultimate outcome of the litigation.

(15C4) Authorizes the MGA to immediately terminate the Agreement upon written notice to the Producer (notification time not specified) upon gross or willful misconduct of the Producer, which includes a plea of guilty or no contest by the Producer or any of its employees to a crime involving moral turpitude. However, the Producer is given appeal rights if the conviction involves an employee.

(15E) Allows either party to terminate the Agreement for any reason upon 15 days prior written notice to the other party.

(16) Requires the Producer to indemnify the MGA, the Company, and their respective officers, directors, employees, parents, subsidiaries, affiliates, agents, representatives, successors and assigns for damages that arise as the result of the Producer’s violation of the law, or the Producer’s errors or omissions. However, the MGA is only obligated to indemnify the Producer (no other related entities, employees or representatives) under the same circumstances. In addition, the indemnification requirement for either party does not take into account the contributory or comparative negligence of the party seeking indemnification.

Location Rider: The Agreement includes an addendum that may limit the Producer’s authority to solicit insurance under the terms of the Agreement to certain locations.

FAIA’s Office of the General Counsel provides this contract review only for general information and comments. It is not intended to answer specific individual legal, business, or other questions. It was prepared solely for use as a guide, is not a substitute for the Agent’s/Agency’s independent evaluation of any provision in a contract, and is not a recommendation that the contract be signed or rejected. If specific legal or other expert advice is required or desired, please seek the services of an appropriate, competent professional, such as a licensed Florida attorney familiar with the Florida Insurance Code. 

 Reviewed December, 2014


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