What Can You Do If Another Party Is Trying to Dissolve a Long Standing Verbal Agreement Without Proper Notice?

Asked about 1 year ago - Stoughton, MA

My insurance agency has had an agreement with another bigger insurance brokerage firm that specializes in commercial & business products. For about 20 years we have done business with them. If we have insureds, but cannot provide the commercial insurance (don't have the specialized market) or wish to provide a better cost we would have this other business write the policy for us & we would both handle the account & share commissions. We have tons of emails, commissions, notes, etc... Recently, this other business changed ownership & today we received an email stating that by 10/1/13 (just over 2 months notice) that we have to move all our business with them or forfeit it to them. This entails hundreds of policies & is a substantial amount in premium so we need more time. What can we do?

Attorney answers (2)

  1. Deborah Gwen Roher

    Pro

    Contributor Level 14

    Answered . If the agreement is oral and 20 years old, it probably doesn't include provisions for termination, so who's to say what's "proper" notice? Consult a lawyer with experience in business transactions and, preferably, familiar with the insurance industry. If you cannot successfully negotiate with the new owner for a more workable time frame, an alternative would be to seek an injunction (court order requiring the other party to do something), but you will need to have a full and frank discussion with your lawyer to learn whether this route is likely to be successful.

    Disclaimer: This site exists to provide information only. It is not legal advice. Answering your question does... more
  2. Constantine T Mariolis

    Contributor Level 12

    Answered . I am not convinced you have a verbal agreement. It seems to me that you have a course of conduct, e-mails and commission statements. These show an understanding of how a referred policy is going to be handled. This is not a 20-year old verbal agreement in my view. Remember that an e-mail and a commission statement is a writing.

    Also this is not an agreement about future business, this is an agreement about policies already booked. I believe you are in a stronger position than you may think. If the company agreed to service a policy you originated, then they may be able to back out of that agreement, but I cannot think of a reason why they would be able to claim the policy as their own. if you didn't act fast enough.

    Get an attorney if you can't arrange an extension after a few phone calls or e-mails.

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