Many traditional P&C Insurance agencies require producers to sign a noncompete agreement before joining the team. It’s common in the insurance industry and may not seem threatening to your future. Before you join an agency that requires you to sign a noncompete, understand the impact and know other options for employment are available.
Considerations Before Signing
Before signing the noncompete, have someone knowledgeable review the agreement to assess the scope and enforceability. Some noncompetes are more enforceable than others based on whether they are:
- Reasonable in scope, tenure, and geography
- Protecting legitimate business interests or intellectual property
- Not precluding someone from earning a living.
Once you review the agreement, it’s imperative you assess whether it could prohibit your future growth and development. Two major considerations include:
- Noncompetes can make you question whether taking another incredible opportunity will inflict legal action based on the agreement.
- If you ever need to leave your job due to emotional unhappiness, instability, or personal issues, the noncompete may prohibit you from returning to your field of interest for years.
If you determine you would like to move forward with the agency, even though they require you to sign a noncompete, ensure the scope of the agreement doesn’t hinder your potential growth. Request the hiring company to limit the industries, geographic region, and/or duration of the contract to what is necessary for the business’ protection. If they are not willing to develop a fair agreement, it’s reasonable to say you would not be happy working for that company.
Another Option for Your Future
A traditional, corporate insurance agency model is not your only option for P&C insurance producer employment. The more rare entrepreneurial or lifestyle agency model traditionally offers fewer barriers to growth and development, as well as ownership and investment opportunities. Entrepreneurial agencies provide producers many benefits, including:
- No noncompetes
- Improved work-life balance
- Higher commissions
- Equity interest and stock opportunities
- Additional tools and resources
Before you sign a noncompete with a traditional agency and limit your future possibilities, consider your options at a lifestyle agency. Download our eBook “6 Questions Producers Should Ask to Ensure Their Company Fits Their Goals,” to help you decide whether you’re making the right decision to achieve your goals.