This is an agreement between a broker and an insurance company for brokerage
services. The broker is engaged to solicit new clients and attract new business
opportunities for the insurance company. In addition, the agreement provides that the
broker will receive a commission fee for any new business the insurance company
receives due to the broker’s reference. This document should be used by insurance
companies or other entities that want to hire a broker to market and solicit new clients to
PROSPECTIVE CLIENT BROKER AGREEMENT – INSURANCE
This Prospective Insurance Provider Broker Agreement (“Agreement”) is made and entered into
this _______________ [Instructions: insert date] by _______________ [Instructions: insert
name of Insurance Provider/Agent], (hereinafter “Insurance Provider”), located at
_______________ [Instructions: insert location] and _______________ [Instructions: insert
name of Broker] with its principal offices located at _______________ [Instructions: insert
location] (hereinafter “Broker”).
WHEREAS both parties have the legal capacity to enter into this Agreement; and
WHEREAS Insurance Provider provides insurance and is seeking additional customers; and
WHEREAS Broker desires to enter into a relationship with Insurance Provider to solicit new
clients for Insurance Provider in accordance with Insurance Provider’s instructions and the terms
of this Agreement, and thereby earn commission income.
NOW, THEREFORE, Insurance Provider and Broker Agree as follows:
1. The above recitals are true and correct and form an integral part of this Agreement.
2. Grant of Authority: Insurance Provider hereby grants authority to the Broker to present for
insurance coverage, risks located in _______________ [Instructions: insert state] under
insurance policies available through Insurance Provider. This authority is subject to laws of
_______________ [Instructions: insert state]. Broker represents that Broker is authorized
by the relevant governing authorities to act pursuant to the terms of this agreement.
3. Responsibilities of Broker: The responsibilities of Broker are as follows:
A. Broker shall use its best efforts to solicit new clients for Insurance Provider.
B. Broker shall determine Broker’s method of obtaining clients, provided that the method is
legal and ethical. Broker may utilize Broker’s employees and outside contractors to
provide the services. Broker shall make sure that a potential client has all the necessary
information pertaining to any transaction under this Agreement. Broker shall at all time
interact with all clients in a professional manner.
C. Broker shall provide worker’s compensation insurance to all Broker’s employees and
D. Broker agrees keep abreast of all current laws, rules, and issues affecting the insurance
industry, in order to conduct its services at the highest level.
E. The Broker agrees to preserve Broker’s membership with the _______________
[Instructions: insert relevant organization in state].
F. The Broker shall keep a _______________ [Instructions: insert state] producer’s
insurance license in _______________ [Instructions: insert state] for property and
G. Broker shall hold any premium payments in trust, and Broker agrees that such premiums
are the property of Insurance Provider. Broker shall make no deductions from the money
held in trust, except for authorized commissions, and agrees that Broker has no interest in
H. All correspondence from Insurance Provider will be treated as confidential by Broker.
This correspondence will not be disclosed without the written permission of Insurance
I. _______________ [Instructions: set forth in detail responsibilities of Broker]
4. Insurance Provider’s Responsibilities: The responsibilities of Insurance Provider are as
A. _______________ [Instructions: set forth in detail the responsibilities of Insurance
5. Commission: Insurance Provider will pay to Broker referral fees for _______________
[Instructions: insert qualification for paying commission]. The following commission
structure will apply:
A. Insurance Provider shall pay Broker a commission of _______________% [Instructions:
Insert percentage number] of the amount Insurance Provider receives from a client
referred by Broker.
B. A commission will be “earned” once the client’s payment is received by Insurance
C. On a _______________ [monthly] [Instructions: Insert relevant timeframe] basis,
Insurance Provider will provide an accounting to Broker. Within _______________
[Instructions: Insert number of days] days of the end of each month.
D. Insurance Provider shall compensate Broker for the entire life of the relevant client
account with Insurance Provider, unless this Agreement is earlier terminated.
[Comment: User should edit the commission structure to reflect the specific agreement of
6. Independent Contractor Status: Broker expressly acknowledges that Broker will be acting as
an independent contractor and not as an employee, for all purposes, including payment of
Social Security withholding tax and all other federal, state and local taxes. The Broker shall
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be free to set its own hours and appointments. Broker shall not hold himself out to the public
as an employee, agent, partner or representative of Company.
7. Exclusivity: The appointment of Broker hereunder is _______________ [Instructions:
insert either “exclusive” or “non-exclusive”] [Comment: User should choose either to
form an exclusive or non-exclusive relationship with the Broker. If User creates a non-
exclusive agreement, then user should also state “Insurance Provider, in Insurance
Provider’s sole discretion, is free to enter into similar agreements with other parties. In
this situation, Broker shall not be entitled to any compensation if a purchaser enters
into an agreement with Insurance Provider through the efforts of other brokers, firms,
8. Separability and Governing Law: If any portion of this Agreement shall be found to be void
or unenforceable, it shall in no way affect the validity or enforceability of any other portion
hereof. This Agreement shall be interpreted according to the laws of the State of
_______________________ [Instructions: Insert state].
9. Power of acceptance: It is understood that this agreement is only authority to solicit offers,
and that such offers are to be submitted to the Insurance Provider for its approval and
10. Term and Termination: The term of the Agreement shall be for ____ [one (1)]. [Comment:
These numbers are not provided for by law, but can be any number the user chooses]
year and shall automatically renew unless terminated by either party. Either party may
terminate this Agreement at any time without cause upon thirty-day written notice to the
11. Time of essence: Time is declared to be of the essence of this agreement.
[SIGNATURE PAGE FOLLOWS]
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This agreement has been executed by the parties on the day and year first above written.
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