To protect him, we got an extra $2MM in a separate umbrella policy.  

Again, when there is a zero balance a full unconditional is due.

There seems to be an active debate at my workplace as to whether small investors really need LLC’s as opposed to having adequate insurance and umbrella policy to cover those.  

I'd recommend checking with several local banks on their policies for your specific property.People absolutely do use delayed financing but I don't believe it's used for most BRRRRs (someone will correct me I'm sure.

Meaning getting a strong liability policy on the property will protect you as much or more than an LLC will.

Less perfect as a long term rental since it a super old construction style with absolutely zero insulation. 

Assuming the new LLC took title subject to an existing loan I don't know why the lender would want or need a new title policy since the insured lien priority shouldn't have changed. 

Also it depends on your goals and your risk tolerance.

it’s just a way for people who can’t afford to buy to get in to Airbnb with zero risk.

Are those filings legitimate even if filed against him two weeks after we closed on the property and I received a fully cleared title policy?