Business Setup as Independent Agent through an FMO

[noflolifehealth]

Hey Guys,

I am 2-15 licensed in Florida looking to start life selling in Florida as a solo independent agent. Goal is to start in Life and move to Medicare after I have some time to dig in and learn the products.

My question is around business setup. My thought process is to start an LLC (taxed as a pass-through), contract with an FMO (looking at pinnacle but open to suggestions), and go from there with all business insurance (E/O, Liability) through the LLC.

Is this the right approach? Will this provide me the liability protection I want/need? My biggest question is can I use an LLC without an agency license? If I can, does the LLC have to be named First Last Name Insurance Agent or can I use a business name? Am I required to have a public office if I am not an agency?

These questions are kind of derived from Chapter 626.112 7A (see below).

I have reached out to Florida Dept of Insurance Agents and Agency Services but can't get a response.

(7)(a) An individual, firm, partnership, corporation, association, or other entity shall not act in its own name or under a trade name, directly or indirectly, as an insurance agency unless it complies with s. 626.172 with respect to possessing an insurance agency license for each place of business at which it engages in an activity that may be performed only by a licensed insurance agent. However, an insurance agency that is owned and operated by a single licensed agent conducting business in his or her individual name and not employing or otherwise using the services of or appointing other licensees shall be exempt from the agency licensing requirements of this subsection.

 

[noflolifehealth]

Bump. This didn't get approved for a few weeks.

 

[Tahoe Ray]

No liability protection for personally produced business with your LLC.

Most carriers will require an entity license to have commissions paid to your LLC (which is the main reason to have one).

You can name the LLc whatever you want. You'll have to check if it's OK in FL but many states just allow you have a virtual office.

Hope that helps.

 

[noflolifehealth]

No liability protection for personally produced business with your LLC.

Most carriers will require an entity license to have commissions paid to your LLC (which is the main reason to have one).

You can name the LLc whatever you want. You'll have to check if it's OK in FL but many states just allow you have a virtual office.

Hope that helps.

Thanks for the response! That's a little concerning. Do you have any advice on the right way to setup a business as a solo independent agent? I'm mostly concerned about liability exposure and keeping the business separate in case I ever want to sell/expand.

 

[Tahoe Ray]

Thanks for the response! That's a little concerning. Do you have any advice on the right way to setup a business as a solo independent agent? I'm mostly concerned about liability exposure and keeping the business separate in case I ever want to sell/expand.

What kind of liability? You can't shield yourself as a professional from errors and omissions. That's what you get insurance for.

If you're no longer producing and have agents as employees, then that structure may protect you personally.

 

[noflolifehealth]

What kind of liability? You can't shield yourself as a professional from errors and omissions. That's what you get insurance for.

If you're no longer producing and have agents as employees, then that structure may protect you personally.

Business Liability in general. I intend to get E&O insurance and General Liability insurance regardless but insurance is not all encompassing and I don't want to put my personal assets at risk. That was my thought process behind getting an LLC but it sounds like you are saying that won't provide me any protection if I am producing under my own NPN.

 

[Tahoe Ray]

Business Liability in general. I intend to get E&O insurance and General Liability insurance regardless but insurance is not all encompassing and I don't want to put my personal assets at risk. That was my thought process behind getting an LLC but it sounds like you are saying that won't provide me any protection if I am producing under my own NPN.

It won't. Professional services are not protected by an LLC. Since "you're the business" any errors can hold you personally liable.

It's no different for a doctor or accountant.

The LLC is more for tax purposes. Once you start making more than the FICA limit, there are a lot of tax advantages (and you can file as an S Corp).

As I mentioned in my previous post, it's also great if you have employees and/or eventually sell the practice.

 

[noflolifehealth]

It won't. Professional services are not protected by an LLC. Since "you're the business" any errors can hold you personally liable.

It's no different for a doctor or accountant.

The LLC is more for tax purposes. Once you start making more than the FICA limit, there are a lot of tax advantages (and you can file as an S Corp).

As I mentioned in my previous post, it's also great if you have employees and/or eventually sell the practice.

So is there simply no way to limit personal liability then? What if you get an agency license/NPN and then contract under the LLC and agency NPN?

 

[Tahoe Ray]

So is there simply no way to limit personal liability then? What if you get an agency license/NPN and then contract under the LLC and agency NPN?

You're the one making the decisions so you're the one that has the liability.

You can't eliminate that liability with a corporate/legal structure. It's still all on you if you personally produce.

Again, that's why you buy E&O.

 

[noflolifehealth]

You're the one making the decisions so you're the one that has the liability.

You can't eliminate that liability with a corporate/legal structure. It's still all on you if you personally produce.

Again, that's why you buy E&O.

Well that is terrifying. So all of these self-made millionaire insurance agents out there are one successful lawsuit away from bankruptcy?