One of the first questions you’ll face when starting a business – or, for existing businesses, when expanding across state lines – is what to call your insurance business.
It seems like a straightforward question, but some monikers could actually run you afoul of the state department of insurance. So, if Billy Shakespeare asked your insurance agency’s chief compliance officer, “What’s in a name?” the answer might be “A few thousand dollars of potential fines.”
If you haven’t yet settled on a name, or if you’re looking to expand into new territory and you’re looking for a roadmap of potential pitfalls, you’re in the right place. Let’s look at some dos, don’ts, and general guidelines for things to think about when it comes to picking the right agency name.
Picking a name for your insurance agency – dos
For an insurance agency, you have some of the same concerns as a regular business. You’re worried about questions like:
- Is it memorable for potential consumers?
- Is it unique enough that people on the internet will find it and I won’t accidentally give business to my competitors?
- Is it going to tell the people who need my products or services what I do?
Another consideration is the long-term plan for the business. Family businesses are the bomb diggity and a life goal for some people, yet names that rely on a family structure or last name can be harder to sell down the road. Consider the eponymous brothers of Stephenson Brothers’ Insurance, who then only have daughters. Aaawkward. And, if the primary value of John Smith Insurance is the name recognition and personal brand of the owner, John Smith, what’ll Jane Jones be willing to pay for it?
So, to the dos:
Do pick a name that’s memorable and unique
Do pick a name that tells people what your business does
Do search for similar names in other states you might do business in down the road
Do run your name by state regulators where it’s required
The trouble with insurance business names – don’ts
Some states require you to clear your business name and any DBAs (also known as “fictitious names”) by the state government, either through the secretary of state or the department of insurance. And the states that require this have particular thoughts on what an insurance business should or shouldn’t be named.
In fact, some states suggest applying for your agency name or DBA with several names, ranked in order of preference, in case multiple variations aren’t compliant with state laws. Some of the other rules that stricter states apply to names and DBAs:
- A name can’t be misleading to consumers. It can’t appear to extend beyond the services you provide. It can’t hint at additional LOAs besides what you actually write under. It can’t include “consultant” or “broker” if you’re actually an agent, and if you are looking for a refresh of the distinction, check out broker regulation at the AgentSync blog). And it can’t give the impression that your agency is a carrier or underwriting service if it actually isn’t. (This is one of a dozen reasons to steer clear of trying to put a professional designation like CLU or CPCU as part of your name.)
- A name can’t be the same or too similar to a name or DBA of other companies already operating in the jurisdiction. California clarifies that, when verifying whether a name is already taken, its state workers include alternate and phonetic variations on agency names to be as thorough as possible. This is also a good reason to submit your name to the secretary of state, even if it’s not legally required in a particular state; if your name or DBA is the first name of record, you have good legal standing if a competitor tries to use the same name.
- A name mustn’t use a forbidden word. Some states have lists of forbidden words, such as “annuity,” “guarantee,” or other terms that might connote products or promises that would basically require a page of disclosure every time you used your name. Many states require the word “insurance” to be followed by “services” or “agency” to separate it from confusion with “insurance company,” which is generally understood to connote a carrier.
What to know about “doing business as” names (DBAs)
California actually requires state approval of your name and DBA before the state approves your business license. Most states require your name to be on your agency license (even if they don’t require you to get state approval). Other states discourage the use of DBAs, and some, like New York, forbid DBAs outright. Wisconsin is the one state that allows DBAs but doesn’t require agencies to provide any legal notice to the state about them whatsoever.
In between the extremes of Wisconsin and California, there are a few common variations to keep an eye on:
- More than a dozen states require DBAs to be listed on an agency’s license.
- A handful of states won’t allow you to use any DBA that you haven’t also registered with your home state.
- Some states limit how many active DBAs you can have in that state.
- Some states limit how many times you can re-file your paperwork to change your business name or add DBAs.
- Many states won’t issue a DBA or business entity license to a sole proprietor or agency that has only a single affiliated producer.
Avoiding compliance problems – it’s what we do
Figuring out what to name your agency and avoiding forbidden words or names or DBA flags is just one area where insurance agencies have to practice vigilance. There’s a million other ways to step out of compliance in the industry.
For businesses looking to keep their producers, variable lines brokers, and adjusters in compliance with licensing and appointing laws, see how AgentSync can help.
