Insurance Agency Acquisition Checklist

Start with a one-page picture you can defend: lines of business, geography, whether you are buying the entity or the book, and whether you can appoint and service what you might acquire. If that picture is fuzzy, more files will not help. They will only give you more pages to misread.

Agree on confidentiality and a small first request. You do not need every contract on day one. You do need enough to know whether a deeper review is worth anyone’s time. Buying an Insurance Agency is the right companion if you have not yet decided what “the deal” even includes.

Owners who want a private starting point can get a free directional estimate from their own inputs before they share a data room. That estimate is informational. It does not replace the files below, and it is not a buyer’s offer.

Ask for commission and fee production by year, by line, and by producer. Add carrier statements or download reports that can be reconciled to those totals. A summary spreadsheet with no source is a story, not evidence.

Separate recurring renewal income from new business, and separate core commission from contingency or bonus income. Contingency can be real and still be the wrong thing to capitalize. If last year only looks strong because of a one-time check, the checklist should force that fact onto the page.

Then ask for the operating picture around the revenue: payroll, rent, producer payouts, and owner add-backs the seller wants you to accept. You do not need a formal valuation model to see whether the book still earns money after a new owner’s cost structure.

• Multi-year production by line, producer, and carrier
• Commission versus fee versus contingency split
• Retention and cancellation or rewrite history
• Top-account list with revenue and tenure
• Basic P&L, add-back list, and payroll or producer payout detail

What Buyers Look for in an Insurance Agency is the narrative version of this section. On the checklist, turn those instincts into documents: retention by year, concentration of the largest accounts, producer ownership of expirations, and the mix of personal, commercial, and benefits.

Carrier files should show volume, loss or profitability signals the seller is willing to share, appointment status, and any volume or mix commitments. A book that is “mostly one market” can be fine if that market will appoint you. It is not fine if the appointment is personal to the seller.

People files matter even in a book-only deal. Employment agreements, producer contracts, non-solicits, and a simple org sketch tell you who can take the book with them. If the owner is the book, the transition plan is the deal.

• Producer and employment agreements, including expiration ownership
• Carrier appointment list and any consent requirements
• E&O policy, claims history, and open complaints
• Who services claims, certificates, and endorsements today

Entity deals need formation documents, ownership cap table, material contracts, leases, litigation, and tax returns. Book deals still need a clean description of what is being assigned and what liabilities stay with the seller. Do not assume “asset sale” means you can ignore the seller’s trust-account history.

Licensing is easy to skip and expensive to discover late. Confirm resident and non-resident licenses, designated responsible producer requirements, and whether the buyer can legally transact in the states where the book lives. A revenue map that crosses states you cannot appoint is not a bargain.

Ask how premium is collected, where it sits, and how carrier payables are timed. Trust-account practices, residual premiums, and unpaid carrier statements belong on the checklist even when the conversation is still friendly. The insurance agency due diligence checklist is the deeper file-by-file pass once these items are in motion.

A checklist that ends at “review the files” is unfinished. Write down the seller’s cooperation period, client-introduction plan, access to the agency-management system, handling of in-force claims, and what happens if a named producer or carrier does not transfer.

Holdbacks, earnouts, and reduced cash at close are how the agreement absorbs facts the checklist found. They are not decorations. If a risk is large and unmeasured, walking away is also a valid checklist outcome.

• Seller transition days and who introduces the buyer
• AMS, email, and document access after close
• Treatment of residuals, return premium, and unpaid contingents
• Backup plan if a key appointment or producer does not transfer

This list is educational. Insurance Agency Value is not a broker, does not represent either side, and does not turn a completed checklist into a price. Counsel and a CPA should review the real documents. Nothing here is an appraisal or a promise that a conversation will become a sale.

If you are the owner, the same list is a preparation tool. Gather what you can, note what you cannot, and stay honest about owner dependence. A free directional estimate can sit beside that work as a private starting range. It does not replace the files a buyer will still request.