Employee employment & non-piracy template — the non-producer staff variant that protects relationship-dependent accounts.

Sellers often focus on producer agreements and overlook the employee equivalent. The oversight matters during diligence. A buyer asks: "Who actually handles the day-to-day relationship with the agency's $500K Auto Group account?" If the answer is "Our long-tenured account manager, Sarah," the buyer's next question is: "What contractual protections cover Sarah's relationships?" If the answer is "We've never gotten around to that," the buyer reads governance gap.

§ 01 · Key differences from the producer agreementThe two material distinctions.

The architecture mirrors the producer template with two material differences. Compensation structure: salary or hourly per Schedule A, not commission. Schedule A is subject to change with 10 days' prior notice (vs. 90 days for producers — reflecting the difference between salary adjustments and commission restructuring). Uncollected premium responsibility: not applicable to non-producer staff. The producer carries 100% responsibility for uncollected premiums; the employee does not.

Everything else mirrors the producer agreement: employee status (not independent contractor), full-time exclusivity, prohibited activities without written authorization, the Property of the Corporation clause, billing and premium handling, confidentiality, non-piracy covenant, assignability, severability, and injunctive relief.

§ 02 · Employment status and exclusivityThe foundational classifications.

The agreement establishes the employee as an employee (not independent contractor) with a full-time exclusivity requirement. The employee must devote all working time to the corporation's business and may not accept similar employment or perform independent services for other entities without written permission.

M&A relevance. Employee status strengthens the agency's ownership claim over work-product and client relationships developed during employment. Buyers want to see clear employee classification and exclusivity provisions.

§ 03 · Employee duties and prohibited activitiesThe accountability provisions.

The agreement specifies core duties: soliciting, obtaining, and servicing insurance accounts in accordance with state law and agency procedures. Specific duties include evaluating risks, notifying customers of coverage limitations, and documenting recommendations.

Prohibited activities (without written authorization): giving legal advice regarding policy wording, incurring any liability on behalf of the corporation, revoking or failing to comply with notices, requests, or procedures issued by insurance companies, general agents, or the corporation. Failure to comply constitutes material breach.

§ 04 · Compensation structure (Schedule A)The salary variant.

Compensation is defined in Schedule A, a customizable attachment covering: base salary (annual) or hourly rate, overtime per FLSA requirements, bonus eligibility criteria, benefits per the employee handbook, and PTO allocation.

Key terms. Schedule A is subject to change with 10 days' prior notice — much shorter than the 90 days for producer commissions because salary adjustments are operationally simpler. Compensation ends on the date of termination. Overpayments are deducted from future compensation. Sums owed by the employee to the corporation and the value of any corporate property in the employee's possession at termination may be offset against future compensation.

§ 05 · Property of the corporationThe load-bearing M&A clause.

All insurance business produced or worked on by the employee — including renewals, expiration data, and all files and records — is the exclusive property of the Corporation and continues to be so after termination for whatever cause.

The employee waives and releases all claims of ownership and covenants not to make or retain copies by computer record or otherwise. This is the same ownership clause found in the producer agreement and is the single most important provision for M&A purposes. When a buyer reviews staff agreements, this clause confirms that client-service relationships developed by the employee belong to the agency — and will transfer with the sale.

§ 06 · Billing, confidentiality, and non-piracyThe protective stack.

Billing. All premiums must be billed by and owed to the corporation. All checks and drafts payable to the corporation. All money received must be turned over in the form received and deposited in the corporation's account. All correspondence, publicity, and advertising are in the corporation's name. The provision prevents any ambiguity about who the institutional client relationship is with.

Confidentiality. The employee will become acquainted with confidential information that is a valuable, specialized, and unique asset of the corporation. Protected information includes client names, policy expiration dates, policy terms and rates, familiarity with customers' risk characteristics, and information about insurance markets for large or unusual commercial risks. Obligation survives termination.

Non-piracy covenant. 2 years post-employment, no geographic limitation, restriction on soliciting or accepting business from any customer or potential customer of the corporation being solicited at the time of termination. Liquidated damages typically apply.

§ 07 · The M&A signalWhy employee agreements matter as much as producer agreements.

Buyers conducting diligence want to see comprehensive covenant infrastructure across all staff who hold client-facing relationships. Producer agreements are necessary; employee agreements complete the coverage. Together they signal that the agency has systematically locked down its relationship assets — making the book a transferable asset rather than a collection of informal individual relationships.

The signal pulls the offer toward the upper edge of whatever readiness band the agency qualifies for. Missing covenants in either category pull toward the lower edge.

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