Embroker takes pride in providing services to our clients and believes you should understand how we are paid for these services. The use of Embroker’s software is free. However, for providing insurance brokerage services, Embroker is compensated in a variety of ways, including commission and contingency fees paid by insurers or agreed to with our clients.
Below is a summary of the types of compensation Embroker may receive:
A commission or fee is normally paid to us by the insurer for the distribution and servicing of your insurance policy. The amount is typically calculated as a percentage of the premium paid to the insurer for your policy although it may vary depending on several factors, including the type of insurance product sold and the specific insurer.
We may also receive income through contingent commissions received from insurers because we have achieved certain criteria, typically measured on an annual basis. The criteria vary, but are usually the result of attracting new customers, retaining existing customers, achieving certain loss or claim results or assisting the insurer with the underwriting process. Because the amount of contingent commission earned may vary, there is generally no meaningful method to determine the exact impact that any particular insurance policy has on contingency arrangements.
Certain insurance companies pay supplemental commissions – fixed amounts – that are based on a broker’s performance during the prior year. These commissions are established annually and are based on the historical performance of the broker. The criteria for supplemental commissions are similar to those for contingent commissions. Unlike contingent commissions, the amount of supplemental commission is known at the time of insurance placement.
Embroker may, on occasion, negotiate a fee for services in lieu of, or in addition to, commissions paid by insurance companies. These fees may include, but are not limited to, subscribing, policy handling and consulting fees. These fees will be approved, usually in writing, prior to binding coverage.
From time to time Embroker may be compensated by insurers for providing administrative services to clients on behalf of those insurers. Such amounts are typically calculated as a percentage of premium or are based on the number of insureds.
Please feel free to ask Embroker about our compensation generally or your specific proposal or placement.