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... bring business advantages over a proprietorship. Members may be able to get assistance from other agents. Members may be able to share markets. Members may qualify for other benefits not available to individuals, such as all being combined for company profit sharing purposes, or better errors & omissions coverage. Members may share expenses and reduce their costs. Other members of the cluster may be potential purchasers of the agent's business on his retirement. A cluster brings risks as well. No corporate protection for lawsuits exists under an unincorporated cluster agreement. ... cluster may be held to be a general partnership, with individual liability for debts of other members or the cluster. For this reason, the members must take care to avoid partnership appearances. They should continue to do business in their individual names, and with their own letterhead. They should also be certain that all members carry adequate insurance, and give evidence of coverage to other cluster members. The cluster agreement should protect individual members from raiding of accounts by other members, should a member leave the cluster, or on a ... . Internal purchases by producers can be facilitated by a partnership or by an ESOP. 1.2. Form of organization of agency. &# 160 1.2.1 Sole proprietorship. A sole proprietorship is a business owned by one person, or by a husband and wife as their community property. It has the following advantages and disadvantages: Simplest to operate. Costs less in taxes and expenses to operate. No double taxation problems. Personal liability of the owner for debts of agency, which exposes his non-agency assets. Multiple owners are not possible ...

...sts. 4.2 Claims by clients for errors & omissions and related matters. ... are enforceable under both California and U.S. law, unless they can be attack...