Broker of Record
The insurance agent or brokerage firm officially designated by a client to handle their insurance policies and act on their behalf with insurance companies. This designation gives the broker authority to make changes, receive communications, and manage the client's insurance program.
Example
“After switching to a new insurance agency, the business owner signed a broker of record letter transferring authority from their previous agent to the new brokerage firm.”
Memory Tip
Think 'On the Record' - this broker is officially on record as your designated insurance representative.
Why It Matters
Having a clear broker of record prevents confusion and ensures one party has authority to manage your insurance needs, negotiate with carriers, and handle claims. This relationship is crucial for businesses with complex insurance needs and individuals who want professional insurance management.
Common Misconception
Many clients think they can have multiple brokers of record simultaneously or that changing brokers automatically cancels their existing policies. In reality, only one broker of record can represent a client for specific policies, and changing brokers doesn't affect existing coverage unless specifically requested.
In Practice
A manufacturing company names ABC Insurance Brokerage as their broker of record for a $5 million general liability policy. When the company wants to increase coverage to $10 million mid-term, ABC has the authority to contact the insurance company directly, negotiate the change, and bind the additional coverage without requiring the company owner to personally handle the transaction. The broker of record letter on file gives ABC this legal authority to act on the client's behalf.
Etymology
This term comes from legal and business terminology where being 'of record' means being the officially documented representative, establishing clear authority and responsibility in business relationships.
Common Misspellings
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