Below Are the Steps to Build a Successful Independent Agency on a Great Foundation

Starting Your Independent Agency – The Setup Needed

• 1. Establish Your Agency Name & Setting up Your Entity – Must Register the Name or DBA with State & Form the Legal Entity – RECOMMENDED

  1. Always a good idea that your business name tells people at least what you do. (ABC Agency, LLC not as good as ABC Insurance, LLC)
  2. Think it through and come up with a name.
  3. Reserve the name, including the DBA
  4. Make sure the name is not already in use in your state
  5. Go to Your state to do this and follow Directions
     1. AZ – https://ecorp.azcc.gov/EntitySearch/Index
     2. NM - https://portal.sos.state.nm.us/BFS/online/corporationbusinesssearch
     3. NV - https://esos.nv.gov/EntitySearch/OnlineEntitySearch
  6. There is a State Fee to do this
  7. ONE & DONE – RECOMMENDED – We strongly recommend using a service that can do all of this for you for a reasonable fee plus the state filing fee. It will save you lots of time, and done correctly the first time.
  8. Estimated Cost – Service = $50 - $150 plus State Filing Fee
  9. AZ Filing Fee = $85, NV State Filing Fee = $425, NM State Filing Fee = $50
  10. You want to end up with a legal business entity registered in your state, a Federal Employment Identification Number, & Articles of Organization Document at a minimum. These services will try to upsell you to other services they offer but are not required.
  11. https://www.zenbusiness.com/r/registration-truic/purchase-plan
      l. https://www.incfile.com/how-it-works/
  12. There are many who offer these services. Make sure you know what you are getting for the fee. The cheapest is not always better.
  13. You can be your own Registered Agent. You don’t need a service to do that for you. This is the person who is listed to receive legal or other notices for your entity.

• 2. Forming a Business Entity – RECOMMENDED

  1. Why do I need a business entity? The single biggest reason is to protect your personal assets from business liability exposures. You most certainly do not want your home, auto, and other personal assets exposed if you would happen to have an uncovered claim you are responsible for. This is Risk Management for you!
  2. The most common entity today for small businesses is an LLC. Counsel with your accountant & attorney on their recommendations.
     1. Choose Business Structure - SBA
  3. Complete the organization application required by your state and file it with the state corporation commission along with the fee associated with doing so.
  4. This can be done by you but we recommend using a service to do this work.

• 3. Obtaining a Federal Employment Identification Number (FEIN) – REQUIRED

  1. Once the entity is officially set up and recognized by your state, apply for your FEIN.
  2. Apply For Number
  3. If you choose to not form a legal entity you will use your personal Social Security Number for this.
  4. Estimated Cost = $0
  5. Required

• 4. Reserving a Website URL – REQUIRED

  1. You are not in business seriously without a website today. It is part of the digital agency and is important to your communication with the public of who you are.
  2. Select a website URL. This generally goes along with your business name.
  3. If my business name is ABC Insurance, LLC, select something close to that if possible.
  4. It needs to be on the shorter side for ease of use and should represent your business as you wish. (ABCInsurance.com better than ABCinsuranceagency.com)
  5. Go to https://www.godaddy.com/ to reserve your website URL
  6. You may have to try several versions potentially to find one available. Although a .com is desired, it Is not required for effective use. Reserve it for a minimum of 2 years.
  7. You will get shown whatever versions are available to you to reserve.
  8. Select one and pay the fee to purchase it.
  9. Estimated Cost - $12 - $100 depending on the number of years you pay for.
  10. Required

• 5. Establishing a Business Email Address – RECOMMENDED

  1. This is your business now. Having a business email address is part of looking like you really are serious about your business. DON’T use your personal email address for business.
  2. Once you have your Website URL established you can now set up your business email address.
  3. A business email address is more professional. a. https://www.godaddy.com/email/professional-business-email
  4. If my business name is ABC Insurance Agency, LLC and my URL for my website is www.ABCinsurance.com, then my professional email address might be Dan@abcinsurance.com
  5. Estimated Cost = $2 - $16 a month (Higher cost include Microsoft Office Recommended) 

• 6. Establishing a Business Phone Number & Fax Number - RECOMMENDED

  1. We do not recommend using your personal cell phone number for your business. It is for personal calls. There are lots of services today that are inexpensive and give you a business phone number & business phone services but forward to or have an app on your cellphone to work as well.
  2. Your business phone number will be used in all marketing so people can find you easily.
  3. VOIP phone service is the most economical thing today to use. Some options are:
     1. Lightspeed Voice
     2. Ring Central
  4. Estimated Cost = $20 - $40 a month
  5. Recommended

• 7. Getting Your Insurance License for Your Entity – REQUIRED

  1. You must obtain an insurance license from the state insurance department on your newly formed entity.
  2. You will have to have your Articles of Organization for your entity to do so. The insurance license must be issued exactly as your legal entity or DBA is set up. (EXACTLY)
  3. This is generally completing the application, providing the documentation of the entity, and then paying the fee for the license.
     1. AZ Department of Insurance
     2. NV Division of Insurance
     3. NM Licensing - NIPR
  4. Estimated Cost = $50 - $120 Depending Upon State.
  5. Required

• 8. Other Business Licenses as Required

  1. Some cities & counties may require business licenses. Check with your local city, and county to make sure you know if you will need any other licenses.
  2. Estimated Cost = Unknown
  3. Required

• 9. Establishing a Mailing Address – REQUIRED

  1. There will be plenty of mail you will receive even in this digital world we live in.
  2. This can be your home, a PO Box, or a mail center, whatever you wish to use to receive snail mail.
  3. Packages cannot be mailed to a PO Box generally so you may consider that in your decision.
  4. Mail & More or similar Options
  5. Estimated Cost = Various – Check Local Availability
  6. Required

• 10. Establishing an Office Physical Address – REQUIRED

  1. You will be required to have a physical office address. Generally, we have found it is better to have it outside your home. This is not required but you must be able to get the approval of Lexis Nexis for security reasons.
  2. Your office location where the computer is located must be in a securely locked room away from the public or others to obtain the required Lexis Nexis Node for company subcode appointments. No Exceptions!
  3. Physical Office Options to Consider: Regus or similar executive office rental locations. Friends & clients who may have office space available not being used that could work for you. Just needs to be a closed-door office you can lock and secure.
  4. YOU DO NOT HAVE TO HAVE A PHYSICAL OFFICE OUTSIDE YOUR HOME AS LONG AS YOUR HOME OFFICE MEETS ALL NEXIS LEXIS REQUIREMENTS.
  5. Estimated Cost = $0 - $400 a month

• 11. Lexis Nexis Approval – REQUIRED for all Personal Lines AZ & NM Agents Only

  1. You must have approval from Lexis Nexis to Sell Personal Lines
  2. Complete the Online Application but only after reviewing your physical office requirements as well as the other requirements in completing the application.
  3. It will ask you for a sponsoring company, use Travelers, and when it asks for your code you can put "pending."
  4. Please make sure the agency name on the application exactly matches your legal entity name.
  5. Address - needs to be your physical address, PO box addresses are not accepted
  6. LexisNexis will often reach back out either via phone or email. They will only try 3 times before withdrawing your application, so you'll want to respond to them quickly.
  7. LexisNexis sometimes will ask for a copy of a lease agreement, utility bill, or an in-person inspection to verify the security of the office space.
  8. Click to Complete Lexis Nexis Application
  9. If unsure of any questions on the application reach out to us and ask before submitting the application.

  10. When you complete the subcode applications with Joann Mannino in the coming days you will need to make sure that you complete those with the exact info as you completed the LexisNexis app for name, address, phone, email, fax, etc.

  11. Estimated Cost = $0
  12. Required 

• 12. Secure a Professional Logo for Your Business – RECOMMENDED

  1. You will use this logo in all your marketing both in print and digital.
  2. It will make you look much more professional.
  3. Inexpensive resources for this a. www.Fiverr.com
  4. Google “cheap logo design” for lots of choices of others who design
  5. You will give them your business name and answer their questions as to logo style.
  6. You will receive several renderings of options which will be refined until you find one you like.
  7. Estimated Cost = $15 - $40 and higher one time. Recommended 

• 13. Setting Up Your Business Bank Accounts – REQUIRED

  1. You will need to have 2 business bank accounts/ 1) Premium/Trust account and 2) Operations/Commissions account
  2. Go to the local bank that you do business with to set these up
  3. The bank will require copies of legal documents showing the organization of your business entity & a copy of your approved FEIN to set up your bank accounts in the business name.
  4. Premium Trust Account – This account is used to deposit premiums into that will be swept out by insurance carriers. Many state laws require that all premiums received from insureds be deposited into this account. If audited, you will be required to show that this occurs. This account is used for agency bill premium, and must at all times contain enough money to satisfy your obligations to your companies. Being “out of trust” is serious and can result in the revocation of an agency’s license to do business.
  5. Operating Account – This account is used to pay all your bills and expenses on your agency. Commission checks or direct deposits of commissions from all carriers be deposited into this account. Money not reserved for payment to companies (your commission) may be transferred into this account from the Premium Trust Account. All agency expenditures except company account currents (Premium Payments) should be paid out of this account.
  6. Order “For Deposit Only” ink stamps for both accounts to use for stamping checks you receive for deposit. Most payments are now done through electronic means today.
  7. If you want to offer payments by insured’s by credit card and electronic check we recommend using www.EPayPolicy.com. Cost is $20-50 a month
  8. Estimated Cost for Bank Accounts = Minimal based on your bank's policies. Required

• 14. Secure E&O Coverage – REQUIRED

  1. You are required to purchase your own E&O insurance with a minimum limit of $1 Million and a maximum deductible of $2,500
  2. Recommended Sources:
     1. Click for SIAA Rockwood Program
     2. Click for SIAA Exclusive Program via RPS
     3. Big I Program in Your State
        1. AZ https://www.iiabaz.com/Products/Pages/ForYourAgency/Errors/default.aspx
        2. NV https://www.niia.org/Resources/Pages/Coverage-for-Your-Agency/default.aspx
        3. NM https://iianm.org/eo/
  3. Estimated Cost = $985 & Up Depending on Experience.
  4. Required

• 15. Secure Cyber Coverage – REQUIRED

  1. You are required to have Cyber Insurance as well at a $1,000,000 Limit
  2. We recommend the SIAA Program with RPS 
  3. Estimated Cost = $500 per year
  4. After completing and signing the app email to Adam_Connor@rpsins.com
  5. If you are in Nevada you also need to complete this Affidavit. 
  6. Required

• 16. Secure Business Insurance – REQUIRED

  1. You need to protect business office location, (Even if in-home) including property, general liability, non-owned auto, worker’s compensation, and non-owned auto coverages.
  2. You can write this yourself through SIAA and our AccessPlus Team.
  3. You will receive all of the commission in the first year.
  4. Yamilet Shaffer will help you get this done. (yamilet@siaaz.com)
  5. Estimated Cost = $300 per year
  6. Required

• 17. Technology Hardware Setup Needed – RECOMMENDED

  1. Computer Hardware Requirements – Desktop or Laptop
  2. Windows 10 Operating System
  3. 250 GB Solid State Hard Drive Minimum
  4. 4 GB Memory or more
  5. Keyboard & Mouse
  6. Large Monitor or Dual Monitors
  7. High-Speed Scanner
  8. Color Laser Printer
  9. Estimated Cost = $0 - $1,200
  10. If you have any questions please contact Scott Skinner (scott@siaaz.com)

• 18. Technology Software Setup Needed – RECOMMENDED

  1. Office 365 – Excel, Word, Outlook, Publisher
     1. You may have already purchased this with the Business email package
     2. Office 365
        1. Estimated Cost $12.50 a month per user
  2. eSignature
     1. Docusign
     2. Pandadocs
     3. SignNow
     4. Estimated Cost = $0 - $25 a month
  3. Password Manager – Essential You Have – Not only stores important passwords but also critical websites and logins for those websites. You will need this with carrier website Logins & Passwords.
     1. Roboform
     2. LastPass
     3. 1Password
     4. Dashlane
        Estimated Cost = $3 - $8 a month depending on features
  4. All 3 are Recommended 

• 19. Website & Social Media Marketing Setup – REQUIRED

  1. Website – Webtricity – Included for Startup Agency for first Year
     1. Professional Customized Website for Your Agency
     2. Please complete the Website Customization Form
     3. Includes Content & Flexible Templates
     4. Includes Autoresponder
     5. Estimated Cost = $0 cost first 12 months minimum – After that $49 per month.
  2. Social Media Setup – Facebook &
     1. SIAA will help you set this up initially & help with content availability
  3. Marketing Materials
  4. All Required 

• 20. Sales Pipeline CRM Setup & Use – RECOMMENDED

  1. Lead management, email campaigns, lead generator – integrated with website and agency management system.
  2. Training & Setup included
  3. Estimated Cost = $150+ monthly depending on the system you choose.
  4. Required
     

• 21. Agency Management System Setup – RECOMMENDED

  1. An agency management system, or AMS, is technology that insurance agencies use to organize their book of business and more effectively run their operations and record communications and transaction with clients.
  2. Estimated Cost = $150+ monthly depending on the system you choose. 
  3. Some agency management systems come with a Sales Pipeline CRM which will reduce the total cost. 
  4. Required

• 22. Auto & Home Multi Company Rating Platform – EZLynx – RECOMMENDED

  1. Comparative rater for all carriers available to write with on the platform
  2. Integrates with your agency management system
  3. Training & Setup included
  4. Estimated Cost = $0 cost first 12 months – Thereafter it is $100 a month for the 1st user, plus for adding additional users

• 23. Accounting Set Up - Suggested

  1. The Agency Management System will track premiums, commissions by carriers and by producers but no typical expense tracking for the business.
  2. Quickbooks will work with the export of data from QQ Catalyst and works for tracking all other agency expenses for the operations. This includes the ability to set up budgets, track expenditures in categories and manage the financial well in your business operations.
  3. Estimated Cost = $12.50 a month & up
  4. Quickbooks Online
  5. Suggested

• 24. Leads Sources

  1. https://www.insuranceleads101.com/insurance-lead-companies/
  2. https://insuranceleadsguide.com/insurance-leads-by-line/

• 25. Budget & Costs

  1. Click for Budget Template
  2. Click for Estimated Agency Startup Costs