Are surplus lines brokers allowed to collect a commission?

Surplus lines brokers are indeed entitled to collect a commission for the services they provide. This is a standard practice in the insurance industry where brokers, including those in the surplus lines sector, are compensated for their role in facilitating insurance coverage placements. Surplus lines insurance involves coverage that may not be available through standard admitted carriers, and brokers play a critical role in connecting clients with non-admitted insurers that can offer the necessary coverage.

Commissions for surplus lines brokers are typically established as a percentage of the premium that the insured pays for the policy they help procure. This compensation structure is essential because these brokers invest considerable time and resources in negotiating terms, finding suitable carriers, and ensuring compliance with regulatory requirements. The ability to collect a commission is a significant aspect of their business model and incentivizes them to provide clients with optimal solutions for their insurance needs.