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

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?

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Attorney answers 2


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 not create an attorney-client relationship. I am a Massachusetts lawyer. Any information provided on this site does not, except as explicitly stated, imply familiarity with laws or procedures peculiar to your state which may differ from those where I practice.



Thank you. In the time being was able to call over to them and discuss this. I objected to the time frame and let them know I was very saddened by their abrupt decision. They explained their decision was due to a change in ownership and a new business plan to grow from within. From there I then let them know that for over 15 years I have never had an issue with them and do not look to have an issue now. I explained that I will do my best to move the business but if it is not moved in time I still expect our agreement to be honored and the commissions shared. The other businesses agreed and stated that they are alright with that as long as they see me making an effort to move the book of business. Also, they stated that any existing policies they will not force me to move until it comes up for renewal (ex: if policy is from May 1st 2013 to May 1st 2014 then it will need to be moved on May 1, 2014) -- especially because if cancelled mid-term there can be penalties and I explained to them that I would not think they would want hundreds of clients to be very upset and have to pay penalties due to their sudden decision. I emailed over confirmation of our conversation as well to them to have it documented. Thank you for your input Deborah. If you have any further input please let me know. I do not want to take it to the next level with legal action quite yet, but just wanted to know my rights... Next time I have an agreement I will be sure to make sure there are provisions for termination.

Deborah Gwen Roher

Deborah Gwen Roher


I am glad you are reaching an amicable resolution.


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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