Should an Independent Agent Incorporate?

[JayG]

Hi:

I am a newly licensed agent and have been speaking to companies about brokering with them.

I have been told by one that I will need to obtain my own E&O insurance and I was told by another that I should incorporate my business to protect myself from someone suing me.

My questions are does an independent agent really need to incorporate? Isn't that that the purpose of E&O insurance?

I am in New York City and incorporating will mean paying almost 9% of NYC Corporation tax vs. 4% of NYC Unincorporated tax plus the hassles of filing separate corporate tax returns.

Thanks for your help.

 

[Crabcake Johnny]

This is the best advice you'll get on this topic: sit down with a CPA.

 

[Phillip Arnn]

JayG,
John is one of the true Gurus on here. He has been there and done that so all of us new guys can benefit from his experience (along with numerous others).
I ask the same, sort of, question earlier in the year. Here is that thread location.
Individual or Sole Proprietor

Good luck,
Phil

 

[wilhelmagency]

If I incorporate, my renewals will continue after my death....is that true ?

 

[AboutThatLife]

Your renewals continue up until the contract stipulates they will end. It's in every contract, dead or not dead.

As far as incorporating, its a tax issue. Because you are a professional, you are professionally liable in any advice you give. If you are not Donald Trump, being a corporation is not really going to protect you.

 

[wilhelmagency]

Thanks for the information.

 

[marindependent]

I am not a lawyer and I am not a CPA.

Their can be tax advantages, but speak with the CPA.

The previous posters are correct about your liability (mostly). Your greatest exposure comes from Errors and Omissions.

However, just like any regular business you have other liability exposures... such as trip and fall liability accidents. These could possibly be shielded from a GL policy AND from incorporation. I would also seek counsel from a lawyer concerning this.

 

[agentinsouth]

Hi: I am a newly licensed agent and have been speaking to companies about brokering with them. I have been told by one that I will need to obtain my own E&O insurance and I was told by another that I should incorporate my business to protect myself from someone suing me. My questions are does an independent agent really need to incorporate? Isn't that that the purpose of E&O insurance? I am in New York City and incorporating will mean paying almost 9% of NYC Corporation tax vs. 4% of NYC Unincorporated tax plus the hassles of filing separate corporate tax returns. Thanks for your help.

The 1st thing you need to do is go work for someone for a few years so you know what you are doing.