KPD receives income primarily through insurance placement and risk management services on behalf of our clients.
Fundamentally, there are three sources of revenue. The first source is commission. Our insurance carriers set a commission level to be paid for the placement of insurance through their facility and we get that set percentage of the premium paid by the client to the carrier.
The second way we may receive compensation is through fees. We charge fees when we provide additional services above those contemplated in the standard commission. In those instances, we will set the fees in advance and establish an agreement with the client for the services to be provided. All fees are agreed upon prior to the effective date of coverage.
Finally, we have performance-based bonus agreements with some of our carriers. These incentives are provided by carriers to encourage us to consider them for the placement of profitable business. Over the last four years, all such arrangements amounted to less than 1% of the premium we placed with our carriers.
To us, the trust of our clients is a foundation of our business. KPD does not put our interests before our clients, and we will not act unlawfully in our conduct of this Agency. We realize that the insurance market is a competitive one and our clients have the right to seek other options with that market. Our job is to act with the integrity our clients have come to expect from KPD and win their business every year by performing above their expectations in all areas.