BROKERAGE AGREEMENT

Last Updated: 08/17/2024 | Questions?: Hello@Dieselinsure.com

This agreement (the “Agreement”) is made and entered into as of the date signed by both parties (the “Effective Date”), by and between Diesel Insurance Solutions Inc., a DE corporation, with its principal place of business located at 29122 Rancho Viejo Rd, Suite 102B, San Juan Capistrano CA 92675 (hereinafter referred to, inclusive of its subsidiaries and related divisions, as “DIESEL”) and a Licensed Insurance Entity and Broker stated on the signature page of this Agreement, (hereinafter referred to as “BROKER”).  Each of DIESEL and BROKER are also referred to herein as a “Party” and together as the “Parties”.

WHEREAS, DIESEL is organized for the purpose of underwriting risks of insurance on behalf of insurance companies as well as brokering and wholesaling business on behalf of insurance companies.

WHEREAS, BROKER desires to submit applications for insurance to DIESEL, and to utilize the knowledge and services of DIESEL in connection with said applications and DIESEL desires to consider and underwrite such business.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter expressed, the parties hereto intending to be legally bound agree as follows:

1.          LEGAL RELATIONSHIP, STATUS AND AUTHORITY OF BROKER

(a)   In the performance of all services and obligations hereunder, it is mutually understood and agreed by the Parties that BROKER is at all times acting and performing as an independent contractor.  This Agreement is not and shall not be considered an employer-employee relationship, joint venture, or partnership of any kind and neither Party shall represent to any third persons that any such relationship exists.

(b)   BROKER understands it is neither an agent nor a representative of DIESEL nor of any insurer or other company used by or represented through DIESEL and the BROKER agrees not to infer or to represent otherwise to any insured of BROKER, and prospective insured of BROKER or any other Party. BROKER may not use DIESEL’s name or the names of its insurers for advertising without the prior written consent of DIESEL.

(c)   No authority is granted to the BROKER to bind DIESEL in any capacity, or those insurers represented by DIESEL. DIESEL has the absolute right to decline to quote or bind any insurance business and no insurance contract is bound except as agreed in writing by DIESEL.

2.          APPOINTMENT

DIESEL hereby appoints BROKER to solicit and submit insurance applications and prospects to DIESEL, at its own expense, applications for insurance policies placed on BROKER’S behalf through DIESEL for which DIESEL has underwriting and issuing authority.  DIESEL reserves the right to restrict BROKER’S access to specific divisions, products and/or subsidiaries of DIESEL at any time, with or without notice.  BROKER shall not solicit, accept or submit any sub-brokered business under this Agreement without the prior written consent of DIESEL.

3.          SERVICE AND OBLIGATIONS OF BROKER

(a)   BROKER will provide all the usual and customary services of an insurance broker, including, without limitation, the delivery of insurance policies to its insureds and advising its insureds of the terms and condition of, or changes to the terms and conditions of, any insurance proposal or contract.  BROKER shall promptly forward all policy information and documentation to insured(s).

(b)   BROKER agrees to represent DIESEL offerings fairly to prospective insured at the time of solicitation in accordance with applicable law and regulations. BROKER agrees to make no representations with respect to the benefits of any program offered by DIESEL not in conformity with the material provided to BROKER by DIESEL.

(c)   BROKER agrees not to quote premiums or rates other than those provided by DIESEL or modify any rate or requirement without the written approval of DIESEL. BROKER agrees not to change conditions or terms, nor bind DIESEL or its insurers, without written approval.

(d)   BROKER shall act in good faith using its best efforts to ensure that all information provided to DIESEL is accurate and complete in all material respects and that such information does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the other information provided not misleading.

(e)   BROKER agrees to notify DIESEL promptly should it become aware of any events, occurrences, facts, circumstances or information that might reasonably be expected to have a material adverse effect on any of the general affairs, business, prospects, customers, competition, properties, financial position or results of operation of any potential or existing insured.

(f)    BROKER shall inform DIESEL as to the type and amount of insurance coverage to be considered for quotation. BROKER understands and acknowledges DIESEL assumes no responsibility toward BROKER or the insured with regard to the adequacy, amount, or form of coverage obtained through any insurance carrier. BROKER acknowledges DIESEL may provide a quote or coverage that differs from the BROKER request.

4.          LICENSING AND COMPLIANCE

(a)   Broker warrants that it is properly licensed to transact business as an agent or broker for all types of insurance policies it shall place through DIESEL in accordance with the insurance laws of the state in which BROKER transacts such business and will immediately notify DIESEL of any such suspension, revocation, expiration without renewal, denial, or termination for any reason whatsoever of any of BROKER’S licenses required under this Agreement if such default is not cured within five (5) days of the breach. 

(b)   Within five (5) days of the Effective Date, BROKER shall provide DIESEL with: (1) a signed, completed copy of a W-9 taxpayer identification form and (2) copies of all licenses required for the BROKER to conduct the insurance business hereunder. BROKER shall promptly advise DIESEL of any changes to the information contained in the submitted W-9 form and shall provide DIESEL with updated copies of all applicable licenses on an annual basis, upon request.

(c)   BROKER will comply with any applicable licensing and surplus or excess lines laws of the jurisdictions in which it transacts business as well as all other applicable laws governing the conduct of business which is the subject of this Agreement, including but not limited to requirements pertaining to countersignatures, to the filing of affidavits with regulatory authorities and the payment of premiums and surplus or excess lines taxes.  The responsibility for making any surplus lines tax filings applicable to any policy placed through DIESEL shall be determined by the Parties in writing prior to the placement of the coverage. BROKER agrees to timely provide DIESEL with all documents required in connection with the excess lines placement. Failure to timely provide all required documents will result in BROKER becoming solely responsible for the excess lines placement filing and premium tax payments.

(d)   BROKER shall comply with any and all laws, regulations, agreements or other legal requirements that require BROKER to make any disclosure concerning the existence of this Agreement, its terms and conditions, or the compensation DIESEL pays to BROKER. DIESEL assumes no responsibility to make such disclosure on behalf of BROKER.

(e)   BROKER shall comply with any and all laws and regulations relating to disclosure of fees charged to the insured.

(f)    BROKER will defend, indemnify, save harmless and protect DIESEL against any and all claims, suits, actions, liabilities, losses, expenses or damages which DIESEL may incur, directly or indirectly, as a result of any violation or alleged violation of any law or for failure to perform the usual and customary services of an insurance broker by BROKER or its sub-brokers, including but not limited to the failure by BROKER or its sub-brokers to deliver policies to their insureds or failing to advise their insureds of the terms and conditions of, or changes to the terms and conditions of, any insurance proposal or contract.

(g)   DIESEL is not responsible, nor have any liability, for any failure or breach by the BROKER to perform their professional services or comply with any insurance laws, regulations, or standards.

5.          PREMIUM REMITTANCE

(a)   Except as otherwise set forth in this Section 5, BROKER guarantees the full payment due to DIESEL of all premiums, including but not limited to deposit, minimum earned, extension and adjustable premiums, fees plus applicable state and local taxes, less commissions, on every insurance contract bound, written or placed for BROKER by DIESEL.  BROKER shall be liable to DIESEL for the payment of all premiums, fees and taxes whether or not collected by BROKER. DIESEL’s billings may take the form of binders, invoices or statements.  The net balance will be due and payable as indicated on quotes, binders and invoices and may vary based upon the payment terms of the issuing company and/or program. If no date is specified, premiums are to be remitted no later than the 10th day following the effective date of the underlying transaction. Preferred form of payment is an ACH deposit. DIESEL banking information will be provided on the Wire Transfer Instruction sheet upon execution of Agreement. 

(b)   In no event shall the payment by BROKER of the premium due on a particular coverage bound be contingent upon issuance of a policy.

(c)   The payment of the premiums to BROKER shall not be considered a payment to DIESEL and BROKER agrees that all premiums received by BROKER for insurance policies placed through DIESEL are the property of DIESEL and the insurance company underwriting that insurance coverage.  BROKER shall hold all such premiums in a fiduciary capacity until such time as said funds are delivered to DIESEL.  BROKER further agrees that such fiduciary funds shall not be used by BROKER for any other purpose whatsoever.  BROKER hereby guarantees the payment of all premiums due on insurance bound or written hereunder, whether or not collected by BROKER and whether or not financed.  Any credit extended by DIESEL or any insurance carrier to the insured or others shall be at the sole risk of BROKER.

(d)   Failure of an insured to pay additional premiums where developed by audit or endorsement does not release the BROKER from its efforts and expenses to collect said premiums.  DIESEL shall only relieve the BROKER of its obligations to collect any premiums associated with an audit of an insured if the BROKER, within thirty (30) days of audit invoicing by DIESEL or any insurance carrier, deems any such premiums to be uncollectible and so informs DIESEL in writing and assigns said invoice to DIESEL for collection and only to the extent DIESEL is relieved of its responsibility to the applicable insurer to collect the uncollectable premium. BROKER will not receive any commission from DIESEL on subsequent amounts collected by DIESEL from audit premiums assigned by it to DIESEL for collection.

(e)   BROKER shall be liable for any and all attorney’s fees incurred in collecting or attempting to collect unpaid premiums, as well as any and all other costs incurred by DIESEL related thereto, in the event that DIESEL or representatives of insurance companies institute collection procedures against BROKER, other than for premiums due with respect to the audit of an insured that are assigned by BROKER to DIESEL within the thirty (30) day allowance period set forth in the immediately preceding paragraph.

(f)    Notwithstanding the foregoing, Paragraphs 5(a) through (e) above do not apply if the insurance service or product placed by DIESEL is billed directly to the insured or consumer by the carrier or DIESEL.  BROKER has no right to request or demand direct billing and any agreement to provide direct bill must be approved by DIESEL.

6.          CANCELLATION OF INSURANCE

Nothing in this Agreement shall be construed as limiting or restricting the right of DIESEL to decline to accept any insurance application or to cancel any binder, policy or contract of insurance issued under this Agreement in accordance with the cancellation provisions of such binder, policy or contract.

7.          COMMISSIONS

(a)   DIESEL shall pay BROKER a commission on each policy written under this Agreement on which the premium shall be fully paid at the rate of commission stipulated in DIESEL’s proposal or binder.  BROKER shall pay DIESEL a return commission on any return premiums at the rate originally allowed when the policy was written or renewed, including but not limited to return premiums on cancellations ordered or made by DIESEL, whether or not BROKER shall have collected the premium. 

(b)   DIESEL may at any time deduct or set off any other commission source any such debt due at any time from BROKER or to recover commission payments due to Diesel. This provision shall survive the termination of this Agreement.

8.          CLAIMS

(a)   BROKER shall immediately notify DIESEL of all claims, suits, and notices of loss and cooperate fully with DIESEL, and/or any assigned third party administrators or representatives of an issuing insurance company to facilitate the investigation, adjustment, settlement and payment of any claim when and as requested by DIESEL and/or said assigned third party administrators or representatives of the insurance company. 

(b)   BROKER will assist DIESEL in the collection of any deductible due from the insured.

9.          ERRORS AND OMISSIONS

BROKER shall maintain at all times during the term of this Agreement and for a period of three (3) years thereafter, errors and omissions liability coverage with a minimum limit of $1,000,000 that provides DIESEL with not less than thirty (30) days’ prior notice any cancellation, modification or non-renewal of coverage with an insurance company carrying a minimum rating by AM Best of A-. The BROKER shall provide DIESEL with evidence of such coverage upon request.

10.       TERM & TERMINATION

(a)   This Agreement shall be effective beginning on the Effective Date and shall remain in effect unless and until terminated in accordance with the provisions of this Agreement (the “Term”).

(b)   This Agreement may be terminated at any time for convenience by either Party, with or without cause, by giving the other Party written notice. 

(c)   Notwithstanding any other provision of this Agreement, this Agreement shall terminate  immediately upon the occurrence of any of the following: (i) BROKER fails to pay over on demand monies belonging to or due to DIESEL or an insurer; (ii) BROKER does not have an active licenses for the types of business conducted or licenses are suspended, revoked, expired, denied or terminated for any reason; (iii) commencement of either a voluntary or involuntary proceeding under any bankruptcy or other insolvency law with respect to BROKER or BROKER shall cease to conduct business, dissolve, liquidate, have a receiver appointed for its affairs or make an assignment for the benefit of its creditors and BROKER hereby agrees to notify DIESEL of the occurrence of any such event with five (5) business days of the occurrence of any of the same; (iv) dissolution and/or liquidation of BROKER; (v)  BROKER’S material default or substantive breach of one or more of the obligations under this Agreement (including any amendments); (vi) BROKER’S or its employees’, agents’ or contractors’ commission of fraud, dishonesty, breach of trust, theft, misappropriation of money, or breach of any fiduciary duty; (vii) the sale, transfer or other substantial change in ownership of BROKER, (viii) cancellation or expiration of the errors and omissions insurance required of BROKER under this Agreement; (ix) misappropriation (or failure to remit) any funds or property due to DIESEL; (x) if BROKER is a natural person, the death of BROKER.

(d)   The terms of this Agreement shall survive its termination with respect to any insurance policy in force at said time as well as with respect to losses or claims arising under policies written pursuant to this Agreement and the payment of premiums or other charges or other accounts or matters remaining unsettled between BROKER and DIESEL.  Additionally, the obligation of the BROKER to indemnify and hold DIESEL harmless for any matter, together with any and all other liabilities owed by the BROKER to DIESEL hereunder or for the breach of the terms of this Agreement, shall survive its termination. 

(e)   In the event DIESEL terminates this Agreement for violation of its terms by the BROKER, the BROKER relinquishes all rights or claim to subsequent commissions or additional premium commissions insofar as such may be necessary to satisfy the interest of DIESEL under this Agreement.  Subject to Section 11 below, DIESEL recognizes the BROKER’S ownership of the insurance contract(s) placed under this Agreement.

11.       OWNERSHIP OF EXPIRATIONS

The ownership, use, and control of expirations and the records related to the policies bound under this Agreement shall remain in the undisputed possession and ownership of the BROKER; provided, that, upon termination of this Agreement, if BROKER has not then properly accounted for and paid all premiums to DIESEL for which BROKER is liable under this Agreement, the use and control of the BROKER’S expirations including all right, title and interest in and to the records thereof shall be vested in DIESEL as of the date of such termination.

12.       INDEMNIFICATION

(a)   The BROKER agrees to indemnify and hold DIESEL harmless from any damages, losses, expenses, liabilities, penalties and other costs or expenses, including without limitation reasonable attorneys' fees, arising out of, relating to or resulting from (i) any breach of this Agreement by the BROKER, the  (ii) negligence, wrongful acts or omissions of BROKER or its employees, agents or contractors or (iii) the adequacy, amount, or form of any insurance coverage obtained or placed through DIESEL or issued by DIESEL or any insurance company. BROKER agrees to pay for any costs and reasonable attorneys' fees incurred by DIESEL to collect any sums due from the BROKER to DIESEL or to enforce the terms of this Agreement.

(b)   DIESEL agrees to indemnify and hold the BROKER harmless from any damages, losses, expenses, liabilities, penalties and other costs or expenses, including without limitation reasonable attorneys' fees, arising out of, relating to or resulting from any breach of this Agreement by DIESEL or DIESEL’s negligence, wrongful acts or omissions, but solely with respect to its areas of responsibility under this Agreement, and agrees to pay for any costs and reasonable attorneys' fees incurred by the BROKER to collect any sums due from DIESEL to the BROKER or to enforce the terms of this Agreement.  BROKER agrees DIESEL will not be held liable and not indemnify BROKER for any allegation or claim of Diesel’s alleged failure to advise or provide adequate limits, coverage or terms and conditions nor for denial of an insureds claim.

13.       CONFIDENTIALITY

(a)   The parties recognize and agree that each party will be provided with confidential information (“Confidential Information”) of the other Party including technical information, materials, data, reports, programs, documentation, diagrams, ideas, concepts, techniques, processes, inventions, knowledge, know-how, and trade secrets. Each of the parties shall maintain the confidentiality of the Confidential Information of the other Party, take steps to minimize the dissemination or copying of such Confidential Information, and use the Confidential Information solely for the purpose of performing its obligations under this Agreement.

(b)   BROKER warrants and represents that BROKER and its subcontractors have implemented and will maintain administrative, technical and physical safeguards reasonably designed to protect Confidential Information (including any nonpublic personal information relating to an identifiable natural person contained therein) against accidental, unauthorized or unlawful disclosure consistent with applicable laws.  BROKER further represents that BROKER and its subcontractors have implemented and will maintain a written information security plan consistent with applicable privacy and data security laws that specifies measures to mitigate reasonably foreseeable internal and external risks to DIESEL’s Confidential Information. A summary of BROKER’S and its subcontractors’ information security program shall be made available to DIESEL upon receipt of a written request. 

14.       MISCELLANEOUS.

(a)   This Agreement is entered into solely between the BROKER and DIESEL, constitutes their entire agreement with respect to the subject matter hereof and supersedes all other oral or written agreements, communications and negotiations with respect thereto. DIESEL assumes no responsibility toward any policyholder or sub-broker with regard to the adequacy, amount or form of any insurance coverage obtained or placed through DIESEL. 

(b)   BROKER shall not assign this Agreement or any benefits or rights under this Agreement without DIESEL’s prior written consent. BROKER shall notify DIESEL in writing of any change in name or address or any sale, transfer, merger or consolidation of all, or substantially all, of the BROKER’S stock or assets including expirations or renewals, to another person or entity. DIESEL shall not be obliged to appoint such other person or entity.

(c)   BROKER shall cooperate fully with DIESEL in any investigation or proceeding of any regulatory or governmental body, or court of competent jurisdiction, including, where required by law, making its books and records available to such entities for inspection, if it is determined by DIESEL that the investigation or proceeding affects matters covered by, related to, or arising out of this Agreement.

(d)   BROKER shall maintain accurate records concerning all business transacted pursuant to this Agreement.  All records, books of accounts and documents of any kind connected to the business conducted under this Agreement shall be open to inspection and audit by DIESEL at any time upon reasonable advance notice to BROKER during the Term of this Agreement and for a minimum period of seven (7) years after the termination of this Agreement.

(e)   The failure by either Party to enforce compliance with any term or condition of this Agreement shall not constitute a waiver of such term or condition.  No waiver of any breach or default of this Agreement shall be valid unless in writing and signed by the Party giving such waiver, and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature.

(f)    Any notice given under this Agreement shall be in writing to the email address listed in the signature section.  Such notice shall be deemed given when electronically delivered. Notices shall be sent to the address of the email address stated or to such other address as request by written notice.

(g)   Dispute Resolution. If a dispute arises from or relates to this contract or the breach thereof, and if the dispute cannot be settled through direct discussions, the parties agree to endeavor first to settle the dispute by mediation administered by the American Arbitration Association under its Commercial Mediation Procedures before resorting to arbitration. The parties further agree that any unresolved controversy or claim arising out of or relating to this contract, or breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The place of arbitration shall be Orange County, California and the arbitration shall be governed by the laws of the State of California. Each party will, upon written request of the other party, promptly provide the other with copies of all relevant documents and additional discovery shall be limited. Time is of the essence for any arbitration under this agreement and arbitration hearings shall take place within 90 days of filing and awards rendered within 120 days. The arbitrators will have no authority to award punitive or other damages not measured by the prevailing party's actual damages, except as may be required by statute. The arbitrator(s) shall not award consequential damages in any arbitration initiated under this section. The arbitrators may determine how the costs and expenses of the arbitration shall be allocated between the parties, but they shall not award attorneys' fees. The award of the arbitrators shall be accompanied by a reasoned opinion.

(a)   Each Party hereby irrevocably consents to such designation, jurisdiction and venue; and hereby waives any objection or defense relating to jurisdiction or venue.

(b)   This Agreement shall be governed by and construed in accordance with the domestic laws of the California without giving effect to any choice or conflict of law provision or rule (or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the California.

(c)   If any covenant, term or provision of this Agreement is determined to be illegal, invalid or unenforceable, that determination will affect only that particular provision, and each other provision will remain in full force and effect and will be valid and enforceable to the fullest extent permitted by law.

(d)   Each Party represents and warrants to the other Party that: (1) it has the full right, power, and authority to enter into this Agreement, to grant the rights provided hereunder, and to perform its obligations hereunder; (2) the execution of this Agreement by the person whose signature is set forth at the end hereof has been duly authorized by all necessary corporate action of the Party; and (3) when executed and delivered by both parties, this Agreement will constitute the legal, valid, and binding obligation of such Party, enforceable against such Party in accordance with its terms. 

(e)   This Agreement supersedes all agreements existing between BROKER and DIESEL and shall be applicable to all business placed by BROKER with DIESEL or its companies.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

PRODUCER:

Entity Name:

Name of Authorized Representative:

Date:

Signature:

DIESEL:

Entity Name: Diesel Insurance Solutions Inc.

Authorized Representative Name:                                     

Date:

Signature: