As a small business franchise owner (LLC) in NJ, are we legally entitled to offer a referral fee to a public insurance adjester who refers our restoration company for a job?

As a small business franchise owner (LLC) are we legally entitled to offer a referral fee to a public insurance adjester who refers our company for a job?


I do not know about other States but in NYS, no, not unless the referral fee is disclosed to the homeowner. Here's the law: "No. A public adjuster may accept compensation from a restoration contractor for referring an insured to the contractor, but the compensation must be disclosed in a compensation agreement between the public adjuster and the insured pursuant to § 25.6 of N.Y. Comp. Codes R. & Regs. 11, Part 25 (1986) (Regulation 10), and may not exceed the maximum compensation stated in that agreement."

This is a common question in NYS insurance circles.

I didn't specify we are in NJ, sorry. Thank you for this info.

I didn't specify we are in NJ, sorry. Thank you for this info.



Well, I had the "New" part right - :D

From what I can tell the NJ Contractor's Association has taken a stand against referral fees so as not to appear they have "put themselves in a position of conflict of interest."

I find nothing to indicate, though, that it is illegal. Obviously different from NYS where the Courts have determined it's an illegal practice.

Thank you so much. This does help.