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What Should I Expect From My Agent?
Workers' compensation commission refers to the amount of premium paid to an
insurance agent or agency by an insurance carrier for writing and servicing an
insurance policy. While most agents and agencies prefer not to disclose commission
information, we believe it is important to help our clients and prospects understand
how the insurance and workers' compensation insurance commission system works.
Once an agent binds an insurance policy, the insurance company pays the
percentage of the total premium as a sales commission. Commission is either in full
(estimated annual commission) or as earned (paid out as premium is received by the
carrier. The agency may receive a chargeback on commission if the policy cancels
early or the annual premium is lower than quoted premium.
The agency is responsible for paying individual agent commission for each producer
working for the agency. The agency is also responsible for covering all other
operating costs associated with marketing and servicing the policy including
customer services staff, I.T., accounting, risk management, and account managers.
Insurance commission is fee paid to an licensed agent or agency for transacting a
sale of an insurance policy or performing a service.
Commission is almost always paid as a percentage of gross premium. However, in some
cases, carriers will also allow fee based commission as well as a reduced commission
percentage on larger premium programs or more non-traditional products such as
workers compensation retro plans, captives, and high deductible programs.
Workers comp insurance carriers actually pay varying amounts of workers'
compensation commission. Commission percentage amounts can vary depending on the
Most carriers will typically pay somewhere between 8% and 12% commission to an agent
or agency. When agents work for an agency or with a middleman such as a wholesaler
or broker they will most likely receive about 50% of the earned commission.
Insurance agents and agencies should provide your business with valuable tools when
shopping for coverage, including:
Consulting and advising clients prior to carrier submission underwriting
Provide affordable quotes and options for your workers comp coverage
Issue certificates of insurance and provide ongoing service
Assist with Claims and Renewals
Business owners are sometimes presented with Broker of Record letters and
sign them by another agent or payroll provider. A BOR is a document that changes the
agent of record with the insurance company and assigns future commission and agency
service rights to the agent requesting the document. Sometimes a business owner does
not understand what the letter does, or they have a reason for not wanting to work
with the existing agent or agency. Another common reason for a BOR is that a
business owner simply prefers to consolidate their coverages with one agency.
Each insurance carrier establishes their own procedures for handling Broker of
Record Letters. Most carriers generally choose to either a) recognize them
immediately, b) recognize them at renewal, or c) reject the BOR altogether. Our
agency policy is to allow Broker of Records bilaterally and assist our customers
regardless of whether they are moving a policy to us or moving it to another agency.
State fund coverage is generally considered the policy of last resort. State fund
plans typically provide coverage to business owners who are not able to buy workers
comp insurance from a private insurance company. Employers and agents generally turn
to state fund options when an employer is in a high risk industry and their NCCI
class codes are not codes private carriers want to cover, or they have had
prior claims, or losses.
Most state fund programs only pay a nominal sales commission because they are not
competing to write more coverage. On average, commission from or other state
funds range from 3%-6% depending on the state and the size of the premium.
At Workers Compensation Shop.com, we're always ecstatic to win a new customer. We
believe that personal and knowledgeable service goes a long way. And we want to keep
your insurance business year after year.
That's why our Agents and Client Service Representatives undergo weekly product and
industry training on workers compensation insurance. Our knowledgeable staff
understands the various state regulations and rules for each workers' compensation
policy. We specialize in Underwriting, Insurance
Auditing, Pay As You Go Reporting,
and Customer Service.
When you work with us, you get a team of professionals ready to assist you with
quotes, policy changes, insurance certificates, renewals, and more. Best of all, you
get a real person on the phone when you call- ready to assist you with coverage and
We work with over 35 workers comp insurance companies across the U.S to shop your
insurance coverage for the best price.
With dozens of Pay As You Go and easy installment plans to choose from, you get more
flexible options for your business.
We've developed Target Programs with our insurance companies to help find you the
right insurance product with lower rates.
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