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Mount Beacon Limited Service Agreement

    Laura Pearce

This review 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

  • Term of Agreement is only until December 31 of the year the Agreement is executed, but will be renewed for one-year periods unless either party decides not to renew and provides 30 days written notice to the other party. 
  • Authorizes Company to change commission rates paid to Agent at any time upon 30 days prior written notice to Agent. 
  • Authorizes Company to directly solicit policyholders for supplemental coverages despite Agent’s ownership of expirations. 

Provision-by-Provision Review

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

I. Authority of Agent

A. Authorizes Agent to solicit and assist in effectuating the Company’s Citizens takeout policies, but does not allow the Agent to solicit or bind any other policies on behalf of the Company.

V. Amendments

A. Authorizes the Company to unilaterally, from time to time, change commissions rates set forth in the Schedule to the Agreement, with 30 days prior written notice to the Agent.

B. Requires Company to provide Agent at least 30 days notice of Company’s intent to negotiate any other amendment to the Agreement.

VI. Indemnification

A, B, and C. Mostly fair and mutual indemnification language, except that Agent must indemnify Company for damages caused by Agent’s acts or omissions AND by Agent’s breaches of the Agreement.  Company is not required to indemnify Agent for damages caused by Company’s breach of the Agreement, but only caused by Company’s acts or omissions.

VII. Termination

A. Provides that the Agreement may be terminated at any time by mutual consent of the parties.

B. Provides that the Agreement may be terminated immediately by the Agent upon written notice to the Company.

C. Provides that the Agreement may be terminated by the Company upon 30 days written notice to the Agent, except in the circumstances set forth in D.

VIII. Ownership of Expirations

A. Provides that ownership of expirations remains with the Agent, and that the Company shall not use records of expirations in any marketing method for the sale, service or renewal of any form of insurance coverage which will abridge the Agent’s right of ownership use and control, as long as Agent notifies the Company within 30 days of termination of the Agreement that Agent intends to exercise possession and control over the expirations.

B. Provides that use and control of the expirations shall vest with the Company if the Agent has not properly accounted for all premiums due the Company.  However, a difference in opinion with respect to balances owed by the Agent will not have the effect of vesting title to the expirations in the Company.

IX. Additional Provisions

A. Provides that the Company reserves the right to send solicitations to a policyholder to add or supplement coverages to his policy. This provision seems to be in direct conflict with the Agent’s ownership of expirations in Section VIII.

D. Provides that Agent acknowledges that Agent is fully responsible for the acts and omissions of all of Agent’s licensed or unlicensed employees.

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 September 2014 

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