Brokers of record are an essential component to the relationship between policyholders and brokers. In real estate, brokers of record work on behalf of property owners to ensure that the property owners are protected from either giving up their property to the government or being forced to shut down their business in a lawsuit, a nightmare scenario that no business owners want to deal with.
1. Legal Compliance
Brokers of record ensure that insurance companies are legally compliant with all provisions listed in an insurance policy. Policyholders do not have the legal expertise or time to go through the entirety of an insurance policy to protect against being given anything less than what an insurance policy entitles them to. For example, if a client suspects they are being treated unfairly with the provisions of their property insurance coverage, they can hire a broker of record at a firm with a great reputation to represent their interests to their insurance company. Brokers of record are experts at interpreting real estate insurance policies and will do everything in their power to protect their clients against receiving an unfair payout from their insurance companies.
2. Regular Compliance
Brokers of record also help clients with regulatory compliance. With the huge amount of regulations present in the real estate world, it can be extremely difficult for property owners to keep track of every single rule. Even worse, if a property owner is found to be not compliant simply because they weren’t aware of certain regulations, they can have their entire business shut down. Hiring a broker of record is one of the best ways to ensure that in the small chance that a property owner is found to be noncompliant with regulations, they will be represented by brokers who know the legal implications of noncompliance inside and out. Brokers of record take the stress off of the shoulders of property owners and provide expertise as to how property owners can best adhere to local, state, and federal regulations surrounding property ownership. For this reason, property owners must hire brokers of record to work on their behalf.
3. Liability Insurance
Lastly, brokers of record can help property owners with liability insurance. In the case that someone is injured or killed on the property, it is crucial to have a broker of record to protect property owners against potential lawsuits that can arise from injury claims. If a property owner gets sued for an incident that caused injury, that property owner can be forced to pay the defendant huge sums of money, and may even be required to give up their property or have to shut their business down as a result of a lost case. If property owners hire a broker of record to help them in their injury lawsuit, the broker will do everything they can to make sure that the terms spelled out in the property owner’s liability insurance policy protect them from any large payouts to the injured. Excellent legal representation, especially in the case of a liability lawsuit, is a must for all property owners.