How to Start a Independent Insurance Company at Home
Starting your own business can be a rewarding career path if you are passionate about what you do. Opening an independent insurance agency from home is one option if you are not immediately prepared to invest in large office space or a rental unit. Most insurance policies are funded over time, where you will earn commissions with monthly, quarterly or annual premium payments from clients. Although the specific regulations vary by state, you can operate as an independent agent serving all clients.
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Instructions
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Choose the type of insurance that you want to offer through your business. You need to specialize in a specific type of insurance for your business, such as auto and home insurance or life and health insurance. You should have experience working with a specialized insurance company before opening your own business and offering insurance services to clients.
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Visit your state's insurance commissioner office website or give them a call to get a copy of the resident business entity checklist. If you plan on doing business outside of the state you live in, you will need to contact that state's insurance commissioner office and request a copy of its non-resident business entity checklist.
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Become a state licensed producer. Every insurance agency must be run by a licensed producer. To do this, you must attend hours of class training designated by your state's insurance commissioner office. You will then be expected to pass a state-administrated exam to become a licensed insurance agent in your area. The hours of class and examination details vary by state. Check with your state's insurance commissioner for more information regarding licensed producer classes and exams.
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Register your insurance agency through the secretary of state. As an independent insurance agent, you should register it as a limited liability corporation to reduce your own personal liability.
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Obtain errors and omissions, known as E&O, insurance that has a minimum of $500,000 and a maximum amount of your choosing. You should get an additional $100,000 of coverage for each licensed sales representative you plan on employing in the future with your business. Depending on your state, the requirements may increase the minimum coverage amount based on how many licensed brokers or agents are currently offering professional services.
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Contact your state's insurance commissioner office to request an appointment for a review of the business requirements. This type of appointment is necessary to make sure you comply with all state agency requirements so you can be authorized to sell insurance as an independent agent. You will need a copy of your the resident business entity checklist, your license, your E&O insurance certificate and any other documents.
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Secure an area of your home to function as proper office space for your independent insurance company upon approval with your state's insurance commissioner to go ahead with setting up your business and recruiting clients. Set up all supplies and equipment such as a computer, telephone, fax machine and anything else you may need to successfully operate your insurance business.
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