Meet Legal Criteria
1. Choose an Entity
There are three broad categories to investigate when determining your business organization: sole proprietorships, partnerships and corporations. While sole proprietorships are the least expensive and easiest to create, they carry a risk of personal liability for the owners. Partnerships and corporations can afford further protection for the owners, but require more paperwork and cost.
2. Obtain IRS ID
The IRS requires a Taxpayer Identification Number for all entities. This number is used in the administration of tax laws. If your agency is organized as a sole proprietorship, your social security number is your tax identification number. If your agency is organized as a partnership or corporation, you are given a Federal Employer Identification Number (FEIN).
- Sole Proprietorships
3. Apply for E&O
Prior to applying for an entity license with the Nebraska Department of Insurance, you will need to get errors and omissions coverage.
Since this is a new independent agency, and professional liability policies are on claims-made policy forms, your new E&O policy will have a retroactive date of the policy inception. In addition, since your agency is new and there is no previous information to reference, the E&O carriers will essentially have to underwrite you, as the owner, and your goals for the agency. E&O carriers will require a business plan and resume with all new applications. Nebraska Agency Services Corp (NASC) is part of a national purchasing group providing E&O coverage to members. For this reason, IIAN membership is required before your E&O application can be processed.
The association is here to help members succeed. IIAN offers support through education, insurance market placement, technical advice, governmental advocacy and agency management support.
4. Obtain Licenses
For sole proprietorships, a general lines property and casualty license is issued to the individual; however, the individual must file a form to register an assumed name under which he or she will be operating. For partnerships and corporations, the entity must have a separate license filed with the Nebraska DOI.