Overriding Commission

In a typical overriding commission structure, a broker or agent receives a commission from the company for placing the policy, as well as an additional commission from the company for any further sales made by other agents or brokers placed by the initial broker or agent. This commission is often referred to as an “overriding” commission, as the initial broker or agent is receiving a commission for the work of other brokers or agents.

The overriding commission may be a fixed percentage of the sale, or it may be a percentage of the commission that the other broker or agent earned from the sale. The overriding commission is often based on the amount of business placed with the company by the initial broker or agent, and is generally higher than the commission the other broker or agent would have earned without the initial broker or agent’s involvement.

In some cases, the overriding commission paid to the initial broker or agent may be a percentage of the total commission earned by all of the agents or brokers placed by the initial broker or agent. This type of commission structure is designed to encourage brokers or agents to bring in more customers or leads, as they will be rewarded for their efforts with a larger commission.

Overall, an overriding commission is a commission paid to an agent or broker for bringing in a customer or lead, or for placing a policy with a particular company. This commission is often based on the amount of business placed with the company by the initial broker or agent, and is generally higher than the commission the other broker or agent would have earned without the initial broker or agent’s involvement.