Key Cluster Considerations
What will be the cluster structure? Will it be very loose and flexible or a much more formal arrangement with many shared services and expenses?
Who will hold company contracts?
Who will be responsible for the premium collection and trust account–the cluster or each member?
What is the limit of the cluster’s management control?
What will be the binding authority for each member?
How will the admission of new members be handled? Will they be treated the same as the founding members?
How will the withdrawal from the cluster be handled? Will this impact the umbrella organization? How will markets be affected?
Should each member sign a non-compete agreement?
What will be the expense to run the cluster? How will the members be charged to be a part of it?
Who do the producers represent, the cluster member or the cluster itself?
Does each agency have its own E&O coverage or does the cluster have one policy? If there are individual policies are there additional exposure issues?