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Edison Insurance Company Full Agency Agreement


This review of Edison Insurance Company’s full agency 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 

  • All Agents within an Agency seem to be required to personally guarantee the Agreement. 
  • Provides that the Agency owns its expirations upon termination of the Agreement only if the Agency has paid all funds due to Managers, but the Agreement does not set forth a dispute resolution process or appeal rights for the Agency when Managers makes such a determination. 
  • Indemnification provisions are not fair, equitable or mutual, and they create joint and several liability for individual Agents within the Agency.   

Provision-by-Provision Review

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

Actual contracting entity is Florida Peninsula Managers, LLC, (“Managers”), the MGA for Edison Insurance Company. 

Section I.

A. To obtain appointment an agent cannot have been suspended or terminated for cause by any MGA or insurer.

C. Each Agent within Agency agrees to be bound by the terms of the Agreement.

Section III.

A. Requires each Agent associated with the Agency to also agree to the terms of the Agreement by executing Exhibit I of the Agreement titled “Joinder in Full Agency Agreement by Agents”. This may create a personal guarantee of the Agreement by every Agent in an Agency.

C. Requires Agency to remit any premiums received to Managers within 24 hours of receipt.

G. Provides that the Agency owns its expirations upon termination of the Agreement unless the Agency has failed to account for or pay all sums due and owed to Managers. This language appears to give Managers the right to make that determination without a dispute process or appeal rights being given to the Agency.

H. Requires the Agency to maintain policy records for seven years, which may be a longer period of time than state law requires for certain documents.

I. Requires the Agency to notify Managers within ten days of any change in the ownership or management of the Agency, which includes new principal agent, officers, directors, managers or producers/agents with binding authority.

L.1. Provides that the Agency will only permit licensed and appointed Agents to utilize Managers’ internet services, but it is not clear whether this includes licensed customer representatives (4-40s).

Q. Requires the Agency to notify Managers within 30 days of any employee, agent or producer of the Agency pleading guilty or no contest to any offense involving trustworthiness or honesty. This provision may need further clarification.

Section IV.

E. Specifies that Managers will pay for only one Agent appointment fee and that the Agency must pay the rest.

Section V.

C. Provides that Managers may, in its sole discretion, suspend an Agent’s or Agency’s authorization and appointment under the Agreement, but does not include language granting any appeal rights to the suspended Agent/Agency.

Section VI.

A. Requires the Agency and each Agent, jointly and severally, to indemnify Edison and Managers for any claims or damages arising out of the negligence or wrongful acts of any Agent or the Agency, whether caused in whole or in part by Managers or Edison. This language is extremely broad and creates a personal guarantee by an Agent if such Agent can be held individually liable for acts of the Agency.

B. Requires Managers to indemnify an Agent or the Agency only when the damage or claim was caused solely by the gross negligence or willful misconduct of Managers, but not when the Agent or Agency caused or even contributed to the claim/damage. These indemnification provisions are clearly not fair, equitable or mutual.

Section VIII.

J. Provides that neither party shall be liable to the other party for indirect, consequential or punitive damages except under the indemnification and confidentiality provisions of the Agreement, or when there has been gross negligence or willful misconduct by either party.

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,revised, or rejected. Any communication you have with the Company regarding this contract should be an individual communication, and not on behalf of a group of agencies or through FAIA. 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 March 2015 

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