Intermediary compensation practices
Liberty Mutual Canada (“Liberty”) primarily distributes its insurance products through independent and licensed insurance brokers. Our contracts with such brokers require that they represent Liberty and its products in an honest and accurate manner and that they comply with all applicable legal and regulatory requirements, including those relating to market conduct.
Commissions:
Liberty typically compensates its brokers by paying a commission for every insurance policy issued (for new business and renewal business.) The amount of base commission is calculated as a percentage of the premium charged to an insured and this percentage differs from one product to another. The base commission rates Liberty usually pays are outlined as follows:
| Commercial Insurance | |
| Commercial Automobile | 12.5% |
| All Other, including General Liability, Excess, Umbrella, Environmental, Property and Package | 15% – 20% |
| Specialty Commercial Insurance | |
| Directors and Officers Liability, Employment Practices, Errors & Omissions, Fiduciary, Crime and Cyber | 15%-20% |
| All Other | 15% – 25% |
| Surety | 25% – 30% |
In some cases, depending on the size, type and complexity of a transaction, Liberty may negotiate an alternate compensation arrangement with a broker, instead of paying a base commission. In addition to base commissions, Liberty may also provide an additional commission to a broker based on the performance of their portfolio with Liberty. The calculation for such additional commission may take into consideration several factors, including the total volume of business a brokerage has placed with Liberty and the profitability of the portfolio. Additional commission is paid annually.
A small portion of Liberty’s products are also distributed through managing general agents (MGAs). They may at times provide underwriting and/or administrative services to Liberty and are compensated for such services by fees that are calculated based on a percentage of the related premium charged to an insured.
Questions:
Inquiries about Liberty’s intermediary compensation practices may be directed to our Marketing & Distribution Department by writing to InfoCanada@libertymutual.com.
You can also contact your broker to learn more about the compensation they receive in exchange for placing your insurance with Liberty.
Please note that the information above refers to our current practices and may be updated periodically as necessary.
