INDEPENDENT CONTRACTOR PRODUCER AGREEMENT
I. PARTIES
XYZ , Inc., hereinafter called 'Agency',
John Doe , hereinafter called 'Producer'
____________________________, date agreement entered into.
II. RECITALS
A. 'Agency' is a duly licensed full-line insurance production firm engaged in the business of transacting and managing insurance and insurance programs in all lines of coverage. 'Agency' is a corporation in good standing in the State of California.
B. 'Agency' has, over the years, developed its own confidential internal methods and procedures for the conduct of its business.
C. 'Agency' has, over the years, developed confidential personal and professional relationships with individuals and firms for the placement of insurance, such relationships having been developed as a result of ongoing expenditures of time and money by 'Agency.'
D. 'Agency' desires to enter a contract to provide service for 'Producer's' accounts and 'Producer' desires to utilize 'Agency's' facilities, markets and personnel for the conduct of his insurance business.
E. 'Producer' is a duly licensed insurance agent/broker in the State of California, and is in good standing with the State Insurance Department.
III. AGREEMENTS
A. Nature of Arrangement
'Producer' will function as an independent contractor owning his own book of business (expirations) and will not be an employee, agent, joint venturer or partner of 'Agency'. 'Producer' may house with the 'Agency', utilize the 'Agency's' markets, staff, and facilities, and will follow established 'Agency' systems and procedures in order to comply with underwriting standards and practices, assure proper handling of applications, and ensure no misrepresentation takes place. 'Agency' will provide customer service to the 'Producer's' book of business. 'Producer' will place accounts through 'Agency'. 'Agency' will provide administrative and accounting services. 'Producer' and 'Agency' acknowledge 'Producer' is not an employee for state, federal, tax and unemployment purposes.
B. Duties of 'Agency'
'Agency' hereby agrees to provide 'Producer' with the following services:
Accounting services including invoicing, accounts receivable, gross monthly billings, individual client accounting information, return premium payments, etc.
Administration services including phone reception, clerical assistance, typing and a monthly accounting of commissions generated by and commission due 'Producer'.
Customer service personnel to handle routine customer work such as certificates, binders, endorsements, invoicing, renewal processing, new account application processing, etc.
Claims services to handle call in/walk in claims, notification of carrier and status follow-up.
Carriers and market appointments broad enough to handle most lines, classes and sizes of accounts 'Producer' writes. Excess and surplus facilities as available in 'Agency' will be available to 'Producer'.
Office space, furniture, supplies, telephone, automation, postage, copy machines, facsimile and other office equipment as needed to conduct business on a daily basis using the 'Agency's' premises as a place to conduct business. The parties agree the nature of the services provided by 'Producer', from time to time necessitates the services be performed on 'Agency's' premises. 'Producer' agrees to conduct such business on 'Agency's' premises during 'Agency's' regular business hours.
C. Duties of 'Producer'
'Producer' hereby agrees to perform the following duties and responsibilities as part of this contract.
Place accounts and policies with 'Agency' in timely manner.
Place new accounts and policies produced after affiliating with 'Agency' in a timely manner.
Gather client information, quote information and proposal information in accordance with 'Agency' standards for quality marketing and underwriting purposes.
Adopt 'Agency' systems and procedures for file maintenance, invoicing, claims, renewal process and new account submissions.
Assist in collection of receivables in instances where account becomes 30 days past due.
Maintain current business and professional licenses and bonds as required.
Copies of all such licenses and bonds shall be made available to 'Agency.' 'Producer' shall provide 'Agency' with his (her) Social Security number and/or tax identification numbers and proof of insurance (automobile, general liability, etc.)
Assist customer service representative and/or 'Agency' marketing person in placement of new business and remarketing of renewals when necessary.
Assist CSR on handling of accounts, coverages and proposal recommendations.
Remain up-to-date on coverage changes. Education and technical expertise to be maintained at professional levels.
'Producer' shall have the right to refuse to perform specific requests by 'Agency' to follow these duties and responsibilities. 'Agency' is solely interested in the results achieved by 'Producer' and is not necessarily in control of the means by which 'Producer' achieves results.
IV. COMMISSION SPLIT BETWEEN
'AGENCY' AND 'PRODUCER'
The following commission splits have been mutually negotiated and agreed to between 'Agent' and 'Producer' and no minimum nor maximum commission split is guaranteed:
A. Property/Casualty Accounts
Type 'A' Accounts - Will be those accounts developed by 'Producer' prior to affiliating with 'Agency.' On these accounts, 'Producer' will be paid 40% of gross commissions and/or fees received on Type 'A' accounts. 'Agency' will retain 60% commission and/or fees.
Type 'B' Accounts - Will be those accounts developed by 'Producer' after affiliating with 'Agency.' 'Producer' will be paid 40% of gross commissions and/or fees on Type 'B' accounts. 'Agency' will retain 60% of commission and/or fees.
Contingent commissions, overrides, excess commissions, bonus commissions and interest income - Will be 100% retained by 'Agency.' These revenue sources will not be shared with 'Producer' as they have already been included as an integral part of the 'Agency's' profit return.
B. Life/Health Accounts
Individual Life Commissions - 'Producer' shall receive % of life commissions produced.
Group Health & Benefit Commissions - 'Producer' shall receive % of all gross commissions, new and renewal, on health and benefits accounts. These accounts will be coded Type 'A' or 'B' as appropriate.
C. Commission Split Changes
The commission split paid to 'Producer' may be changed at any time by mutual agreement of both 'Producer' and 'Agency.'
D. Expense Responsibility
As an independent contractor and not an employee, 'Producer' will be responsible for the following expenses from his various commission splits:
Taxes, including quarterly income, state and/or federal taxes and Social Security, self-employment taxes.
All fines, fees, licenses, bonds or other charges or taxes required of or imposed upon 'Producer.'
Automobile, travel, entertainment, promotion
Education
'Agency' will pay all reasonable office expenses such as supplies, letterhead, phone, postage, etc.
'Agency' shall not be responsible for any other expenses incurred by 'Producer' including but not limited to: FICA (Social Security) taxes, state or federal unemployment contributions, state or federal income taxes, disability, life and workers' compensation insurance or coverages.
'Producer' will be given an accounting of paid gross commissions monthly by the 10th of each following month. 'Producer's' commission split will be paid on the 15th of each following month. 'Producer' will be given a complete accounting annually of his total gross commissions for all Type 'A' and 'B' accounts. 'Producer' will have the right to audit the statements at any time at 'Producer's' cost.
V. TERM OF CONTRACT
This agreement shall commence on the effective date designated on the signature page and shall continue thereafter from month-to-month, unless terminated. Either party may terminate the contract at 90 days notice, subject to the assignment of renewal rights provision and/or 'break-up' clauses provided for in subsequent paragraphs.
This agreement shall terminate automatically, and the 90 day notice requirements shall be waived, on the occurrence of any of the following events:
- Bankruptcy or insolvency of either party.
- Sale of the business of either party.
- Death of 'Producer'.
- Failure by either party to meet deadlines, work standards and/or quality client and customer service conduct and expectations normal to the industry.
- The destruction of either party's property by the other party, or theft or dishonesty on the part of either party.
VI. CONFIDENTIAL INFORMATION AND TRADE SECRETS
'Producer' will, during the term of this Agreement, be working with confidential information and trade secrets belonging to 'Agency,' including, for example, internal procedures, programs and forms. In addition, 'Producer' will have access to lists of insured customers, information regarding habits and insurance needs of customers and prospects, personal information as to customers and prospects, locations and descriptions of insured properties or properties proposed to be insured, expiration data of insurance policies, insurance daily reports, and other information which is not generally or easily obtainable.
'Producer' acknowledges and agrees that all such information is confidential and/or constitutes trade secrets and is the exclusive property of 'Agency.' 'Producer' covenants and agrees that he will not disclose to anyone, either directly or during the term of this Agreement or at any time thereafter, any such confidential information, nor will he use the same for any purpose other than in the course of this Agreement and for the exclusive benefit of 'Agency.'
VII. OVERDUE ACCOUNTS RECEIVABLE
'Producer' will be responsible for final collection of 'Agency' accounts receivable reaching 30 days due. Should an account reach 30 days outstanding, 'Producer' will be notified by 'Agency.' If account is not paid by day 45, 'Agency' will terminate coverage for account, or at 'Producer's' option allow coverage to continue. If 'Producer' elects to maintain account in force, 'Producer' agrees to fully pay any bad debt or uncollectible balance that may occur on account. An account will be considered uncollectible if it reaches 120 days past due. On all balances over 60 days due, 'Producer' agrees to pay 1% of outstanding balance monthly. (Example: receivables of $30,000 over 60 days due would require a monthly late charge payment by 'Producer' of 1% or $300.)
VIII. ERRORS & OMISSIONS INSURANCE
'Producer' and 'Agency' have agreed 'Agency' will include 'Producer' in its errors and omissions policy. 'Agency' shall pay all premiums on such policy on behalf of 'Producer.' However, 'Producer' will be responsible for paying any deductible incurred by 'Agency' for a claim on any of 'Producer's' accounts where 'Producer' is clearly at fault. If fault cannot be fully determined, the errors and omissions deductible will be evenly split between 'Producer' and 'Agency.'
IX. OTHER LIABILITIES
'Producer' will have no authority to place 'Agency' under any financial liability other than the binding of insurance coverage where 'Agency' authority exists. Any liabilities incurred by 'Producer' on behalf of the 'Agency' will be strictly prohibited and become the sole responsibility of 'Producer.'
'Producer' shall indemnify and hold 'Agency' harmless against any and all liability imposed or claimed, including attorney's fees and other legal expenses arising directly or indirectly from any act or failure of 'Producer' or 'Producer's' employees, agents or assistants or sub-contractors, including all claims relating to the injury, disability or death of any person or damage to any property.
X. AGREEMENT 'BREAK-UP' PROVISION
Upon affiliating with 'Agency', 'Producer' may terminate agreement upon 90 days notice any time during the first 12 months of the contract without penalty or financial obligation of either party. After 12 months, a break-up provision is provided. If 'Producer' chooses to terminate agreement with 'Agency' and leave his accounts with 'Agency', the 'Producer' will be paid by 'Agency' as provided for in paragraph XI. If 'Producer' terminates contract and takes his Class A accounts with him, the 'Agency' will be paid 25% of renewal commissions on 'Producers' Class A accounts for 36 months following the date of termination. If 'Producer' terminates contract and writes any Class B accounts post termination the 'Agency' will be paid 50% of renewal commissions for 36 months on the Class B accounts written by 'Producer.' 'Producer' agrees to pay the break-up fee and acknowledges the fee as a key element of this contract.
XI. ASSIGNMENT OF RIGHTS TO PRODUCER'S ACCOUNTS
'Agency' hereby agrees to assume the rights to renewal and control of all of 'Producers' Type A and B accounts upon 'Producer's' death, disability or retirement and subsequent termination of this contract. 'Agency' agrees to pay 'Producer' a deferred commission for a period of 60 months following termination of this contract on the following schedule:
A. 30% of renewed commissions on Type 'A' accounts renewed for 60 months.
B. 15% of renewed commissions on Type 'B' accounts renewed for 60 months.
The payments will be made on the 15th of the month following each calendar month-end on gross commissions paid to the 'Agency' on 'Producer's' accounts.
XII. NON-SOLICITATION AGREEMENT
To protect the interests of 'Agency' in 'Producer's' accounts in the event 'Agency' assumes the rights to renewal and control of 'Producer's' accounts under the provisions of paragraph XI, as hereinabove described, 'Producer' covenants and agrees as follows:
A. For a period of 90 days following termination of this Agreement and purchase of 'Producer's' accounts, 'Producer' will not publish, distribute, or cause or allow to be published or distributed, notice to any of 'Producer's' accounts to the effect that 'Producer' is no longer affiliated with 'Agency' or that 'Producer' has relocated his business or is affiliated with or employed by any direct or indirect competitor of 'Agency.'
B. For a period of 36 months following termination of contract, 'Producer' shall neither call upon or solicit, either for himself or for any other person or firm, any Class 'A' and Class 'B,' accounts, nor shall 'Producer' make known to any other person or firm, either directly or indirectly, the names or addresses of any such 'Accounts', or any confidential information relating to any of them; provided, however, that the foregoing limitation is not intended to prevent 'Producer' from soliciting accounts which have not had any business in force with 'Agency' during the 12-month period preceding termination of the Independent Contractor Agreement.
To protect the interests of 'Producer' in the event 'Producer' terminates this Agreement and retains control of his renewal rights, 'Agency' agrees to adhere to the provisions noted in paragraphs XII.A. and XII.B.
XIII. NON-INTERFERENCE WITH EMPLOYEE RELATIONSHIPS
'Producer' agrees that during the term of this Agreement, and for a period of 24 months thereafter, he will not attempt to hire or entice away any employee of 'Agency' or induce any such Employee to terminate employment with 'Agency.'
XIV. INJUNCTIVE RELIEF
'Producer' stipulates and agrees that breach by 'Producer' of any covenants or agreements made by him with respect to Confidential Information and Trade Secrets (the Non-Solicitation Agreement), or Non-Interference With Employee Relationships would result in damages that are difficult to ascertain and/or irreparable injury to 'Agency's' business. Accordingly, 'Producer' agrees that 'Agency' shall be entitled to immediate injunctive relief to any account or threatened breach of such covenants or agreements.
XV. ENTIRE CONTRACT
This Agreement herein represents the sole and entire agreement between the parties and supersedes any and all other agreements, written or oral, between them.
XVI. WAIVER OR MODIFICATION
No waiver or modification of any term of this Agreement shall be effective unless in writing and duly executed by the party to be charged therewith. Waiver of any breach hereof shall not operate as a waiver of any subsequent breach, nor may the same be asserted in any proceeding as an estoppel against the party asserting such subsequent breach.
XVII. GOVERNING LAW
This Agreement shall in all respects be governed by the laws of the State of [State]. Venue of any suit or other proceeding hereunder shall be properly placed in [Name of County] and both parties waive any objection to venue of any such proceeding therein.
XVIII. ATTORNEYS' FEES
If any action be brought by either party to enforce or seek damages for breach of any provision of this Agreement, the prevailing party in such action, if there be a prevailing party, shall be entitled to recover, in addition to costs of suit, such reasonable attorneys' fees as the tribunal determining the action may award.
XIX. ASSIGNMENT
'Agency' may assign the rights and benefits given to it in this Agreement, and this Agreement may survive any sale of assets, merger, consolidation, or other change in the corporate structure of 'Agency.' 'Producer' shall not assign the duties or obligations or responsibilities under this Agreement without the prior written consent of 'Agency.'
XX. BINDING EFFECT
This Agreement shall be binding upon and endure to the benefit of the successors, assigns, legal representatives and heirs of the parties.
XXI. SEVERABILITY
If any term, condition, or provision of this Agreement shall be found to be illegal or unenforceable to any extent for any reason, such provision shall be modified or deleted so as to make the balance of this Agreement, as modified, valid and enforceable to the fullest extent permitted by law.
XXII. ARBITRATION
1. Any controversy or claim arising out of or relating to this Agreement or any Addendum hereto, shall, if the same involves a claim for money or compensatory damages, be resolved by binding arbitration before a single arbitrator in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Upon initiation of an arbitration proceeding by either party, the parties shall have 30 days within which to agree upon a single arbitrator. Failing such agreement within such period, either party may request that an arbitrator be appointed by the Association in accordance with its rules.
2. If such controversy or claim involves a claim for injunctive or other equitable relief, and suit or cross-claim for such relief is filed in a court of competent jurisdiction, the litigation shall be bifurcated to the extent feasible, to the end that all issues other than those required to be determined by the court shall be determined by Arbitration pursuant to subparagraph XXII.1 above.
XXIII. NOTICES
All notices called for in this Agreement shall be in writing and shall be served either (a) personally by handing the same to the person to be served or leaving the same with an individual at the person's place or residence; or (b) by mailing the same by certified or registered mail to the party to be served at the address shown below or at such other address as the party may hereafter designate to the other in writing. If notice is personally serviced, the date of such notice shall be deemed the date on which it is served. If notice is served by mail, the date of such notice shall be deemed the second business day following the day on which it is mailed.