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I know I've heard of people charging to send COI's but is anyone here doing it? If so....how much do you charge?

when I was a retail broker, we insured a number of Condo and Town Home Associations. We would charge $100 to issue the Property and/or Quake Certificate needed to close escrow, and never got a pushback, especially since our charge was just one is a bucketful of escrow charges.

For a COI for a commercial Liability client, like one of your Artisan subs, you might have a more difficult time. This is when your broker fee would come into play. Many of my retail brokers will add a broker fee upfront on clients whom they know will generate a lot of certificate work through out the year. Other than that, I don't know of anyone successfully getting a per certificate fee from their clients...but it's probably not a bad idea. I would probably look to build those charges in to one up-front broker fee, though. More palatable to your client.

I'd suggest checking with your state's Dep't of Insurance. Issuing certificates could be considered a part of the normal service an insurance agent provides.

If you have an account that requires a large amount of certificates, and the commission doesn't cover your expenses, then you should consider a separate annual service fee to cover the cost.

But charging a "per certificate" fee could be questionable, and give your state's DOI to do an audit on your agency (which could result in fines/license suspension or worse).

I've seen brokers charge individual fees for such things as certificates of insurance; issuing ID cards; claims reporting; endorsements; and more. Often this is disgraceful. We receive a commission to service our clients. I agree that an upfront service fee, at times, is warranted, depending on the account and it's service load, however, one must be acting as a broker, not an agent, to charge such fees. You then need to make sure you are in compliance with your State DOI. Service items that are a normal part of servicing account should not be charged for. Unwarranted fees will eventually lead to you losing the account and possibly harming your reputation.

Be careful and be ethical.

I charge a broker fee for accounts that have heavy cert activity for the premium but I don't think you want to get into a billing/collections nightmare by charging per cert.

I once had a commercial appraisers E&O account. They needed about 200 COI's a year and produced $175 a year commission to me, the broker.

A painters $500 Artisan policy's gross commission to me is $50. How many COI's can that $50 commission provide until you are working for free?

For 17 years I also was Securities licensed and an RIA. I attended a lot of meetings that trained about business operations. One of the biggest downfalls of many businesses is that they don't know what something costs them. Such as, how much does that COI truly cost you to prepare and get to the client? If it must go in the mail you start out at almost half a dollar. Then add on the, time to prepare, operating budget,profit, etc. You'll soon see that a $50 commission is soon gone.

Now you may say that the $1,000 a year commission offsets the Artisan loss. maybe but this isn't a retail store that can use loss leaders. We can't decide when to raise a price to offset that loss leader. Once upon a time every GC didn't need to be an AI on a policy but now they do. That means that you must get the AI endorsed (unless the policy aready covers AI's and contracts issues). This alone is one more step in the COI process and adds to its cost.

That's a question: what is the real COI cost us to e-mail / fax / snail mail?

It is those costs that we don't think about that get us such as: "The average business-to-business sales call cost $329 in 2001, according to Cahners Research."

23,341 of 88,000 businesses in industries including building/construction, communications, electronics, entertainment, food, manufacturing, packaging, printing, retail, and/or science responded to the survey conducted July""Sep8tember 2001.

I do act as a broker and do not work for a retail agency.

Insurance101 wrote:I've seen brokers charge individual fees for such things as certificates of insurance; issuing ID cards; claims reporting; endorsements; and more. Often this is disgraceful. We receive a commission to service our clients. I agree that an upfront service fee, at times, is warranted, depending on the account and it's service load, however, one must be acting as a broker, not an agent, to charge such fees. You then need to make sure you are in compliance with your State DOI. Service items that are a normal part of servicing account should not be charged for. Unwarranted fees will eventually lead to you losing the account and possibly harming your reputation.

Be careful and be ethical.

Etimer,

Good post. I have let a few good sized accounts leave and not pursued others because they were simply not profitable without a significant broker fee. You cannot profitably write an account that generates less than $5000 in commission but requires certs on a weekly if not daily basis. One of the accounts was a commercial overhead door guy that was worth $3600 in commission but required about 700 certs a year. I prefer to let other brokers work for free.

Etimer,

Good post. I have let a few good sized accounts leave and not pursued others because they were simply not profitable without a significant broker fee. You cannot profitably write an account that generates less than $5000 in commission but requires certs on a weekly if not daily basis. One of the accounts was a commercial overhead door guy that was worth $3600 in commission but required about 700 certs a year. I prefer to let other brokers work for free.

Amen!

Come on now, what has happened to good customer service. We're their insurance agent - they can get that deal direct. They guy down the block will also surely let them know that their agency issues them for free (as we all should - ethically). Don't you know that greed breeds a small book in the end? Good service will get & keep your customers.

ssondagt wrote:Come on now, what has happened to good customer service. We're their insurance agent - they can get that deal direct. They guy down the block will also surely let them know that their agency issues them for free (as we all should - ethically). Don't you know that greed breeds a small book in the end? Good service will get & keep your customers.

I just came from a restaurant. I suggested that they pay me for using their fine services, after all...they are in the business of servicing food. For some reason they didn't like the idea and I don't know why? Then I asked them if after paying my bill, can I have that piece of cake in the fridge. for free?

What the heck, don't these people understand business?