Guide to Insurance Licensing for the Non-Insurance Business

Embedded insurance is a great opportunity to increase your revenue, diversify your offerings, and deepen customer relationships but before any of that can happen, you and your company need to be licensed. In this blog, we’ll go over what an insurance license is, why it matters, and how to attain the right licenses for your business.

What Is an Insurance License and Why Is It Important?

An insurance license is a certification given by individual states that allows an individual or entity to sell, solicit, or negotiate insurance in that particular state. Each state requires a unique license, so if you wanted to sell in more than one state you would need to attain a license for every state you intended to sell in.

If you or your company were to attempt to sell or market insurance without a license, you would be subject to large fines and legal repercussions, which makes attaining a license the crucial first step in the insurance selling process.

There are many different kinds of insurance licenses available, but for the purposes of becoming a distribution partner who sells and markets insurance on behalf of a carrier, we will be discussing the Individual License and Entity License.

Individual and Entity Licenses 

An Individual License, also referred to as a “Producer” or “Agent” License, is given to an individual after they complete a pre-licensing course and tests in their resident state. The purpose of this license is to educate the holder on the ins and outs of the insurance process and ensure that before selling, soliciting, or negotiating insurance, they are informed and responsible.