Producer employment & non-piracy template — the contract that turns producer relationships into a transferable asset.

The producer employment agreement is the contract that translates strategy into binding legal obligations. The template runs roughly fifteen sections covering status, exclusivity, duties, premium responsibility, compensation, ownership of business, confidentiality, non-piracy, and standard provisions.

§ 01 · Employment status and exclusivityThe first foundational distinction.

The agreement establishes the producer as an employee — not an independent contractor. The distinction is critical for ownership purposes. Work-product created within an employment relationship generally belongs to the employer; the same work-product in an independent-contractor relationship is more contestable.

The full-time exclusivity clause requires the producer to devote all working time to the corporation's business and prohibits accepting similar employment or performing independent services for other entities without written permission. This prevents producers from building parallel books at competing agencies while servicing agency clients.

M&A relevance: buyers want to see employee status and exclusivity. Agreements where producers are classified as independent contractors with no exclusivity create significantly higher book-portability risk.

§ 02 · Producer duties and premium collectionThe accountability provisions.

The agreement specifies core producer duties: soliciting and obtaining insurance accounts, evaluating risks, notifying customers of coverage limitations, and documenting recommendations. It explicitly prohibits producers from giving legal advice, binding coverage, or incurring liability without written authorization.

Critical provision — uncollected premium responsibility. The producer is solely responsible for 100% of uncollected earned premiums on any insurance contract obtained by the producer. If an account is over 90 days old, the uncollected gross premium is charged against the producer's compensation. The agency retains the right to adjust compensation to reflect failure to collect premiums.

M&A relevance: premium-collection accountability is contractually assigned to producers, reducing the agency's uncollected-premium exposure and supporting cleaner accounts receivable at close.

§ 03 · Compensation structure (Schedule A)The customizable component.

Compensation is an agreed-upon percentage of Commission Income realized by the corporation, as defined in Schedule A — a customizable schedule by line of business with separate rates for new business and renewals.

Key terms. Schedule A is subject to change with 90 days' prior notice at the President's sole discretion. Compensation ends on the date of termination — no trailing commissions for policies produced or serviced prior to termination, regardless of when commissions are received. Overpayments are deducted from future compensation. The producer is indebted for excess commissions resulting from policy cancellations. The producer is indebted for premiums the agency must pay carriers due to the producer's failure to timely cancel non-paying policies.

M&A relevance: the termination-of-compensation clause ensures departing producers have no trailing commission claims post-close, protecting the buyer from ongoing payment obligations.

§ 04 · Property of the corporationThe explicit ownership clause.

This is the load-bearing section for M&A purposes. All insurance business produced during the agreement — 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 producer waives and releases all claims of right or ownership and covenants that they will not make or retain copies by computer record or otherwise.

When buyers review producer agreements, this section is the first thing they check. A clear, unambiguous ownership clause in every producer's agreement is the strongest possible evidence that the book of business is a transferable asset.

§ 05 · Confidentiality and non-piracyThe protective stack.

Confidentiality. The agreement establishes that the agency's business is highly competitive and that the producer 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 concerning insurance markets for large or unusual commercial risks. The obligation survives termination.

Non-Piracy Covenant. Restricts the producer for 2 years after leaving employment from directly or indirectly soliciting or accepting insurance or bond business from any customer or potential customer of the corporation being solicited at the time of termination.

Key enforceability features. No Geographic Limitation: the restriction applies regardless of customer location or producer place of work. Broader than typical non-compete agreements limited by geography. Solicit or Accept: closes the "they called me" loophole — the producer cannot accept business from former customers even if the customer initiated contact. Liquidated Damages: typically 100% of commissions for 3 years on each breached client (some agreements use the 150% × annual benchmark from the Producer Buy-Sell framework).

§ 06 · Standard provisionsAssignability, severability, and the M&A connection.

The standard provisions matter for M&A specifically. Assignability: the agreement is assignable to a successor entity — meaning when the agency is sold, the producer agreement transfers to the buyer without re-execution. Severability: if one provision is unenforceable, the rest survives. Injunctive relief: the agency may obtain injunctive relief to enforce the non-piracy covenant — court orders stopping the breach immediately, not just monetary damages after the fact.

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