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Exit Clauses – Don’t Get Stuck

Aug 11, 2020 | Industry News

There are many aspects to consider when looking at what network may be the right fit for your agency. One of the most important questions, if not THE most important question you should ask is, “What are the Exit Terms?”

Of course, when joining a network, we all hope for that long-term relationship, but if for some reason it is not working, it helps to know what you are in for. Before signing a contract, ask these questions:

  • Blocked Markets– Will I be blocked from markets the network has access to for any amount of time after leaving?
  • Buy-Out– Will I need to buy my book at a certain rate/percentage if I choose to leave? Keep in mind that percentage may look trivial when you’re initially getting started and have a small book, but what could that buy-out look like 5 or 10 years down the road?
  • Contract Length– How long of a contract am I signing? If I break the contract, what are the repercussions?
  • Book Ownership– Do I own my book, or does the network have first right of refusal if I leave or want to sell?
  • Code and/or Policy Transfers– What will the process look like to get my codes or policies transferred out of the network, if allowed?

As always, we encourage you to have a lawyer look through a contract before signing. Don’t get stuck in a sticky situation!

For more information on what PIIB’s exit clause looks like, please reach out to opportunity@piib.com.

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