Is Liability Insurance enough? Or should I be an LLC?
by Lisa Stuebing
I am working on my business plan and I have been weighing the pros and cons of being either Sole Proprietorship or a Limited Liablity Company. (Sometimes called Limited Liability Corporation -- LLC).
The advantages of being an LLC appear to be: 1.) A slight tax advantage, however on Federal taxes you are still taxed as a Sole Prop., 2.) Personal protection from debt, 3.) Limited liability in case of lawsuit.
The drawbacks are: 1.) Greater expense to create and maintain an LLC, 2.) Loss of LLC status if you are not meticulous in maintaining the multiple extra legal requirements, (you revert to Sole Prop.). The coporate veil is pierced, as they say.
My main concern is liability. Is it possilbe to carry enough insurance to protect my personal assets? How much insurance is a good bet - $1 M or $500 K or ....? If so, it seems that Sole Prop. is the way to go.
This site is awesome! Thanks for this service!
Business Assets Insurance
I am a sole proprietor who is starting an online personal training business. It appears that individual liability insurance would cover me personally and any personal assets. Would it not cover business assets, as well? If not, what insurance should I obtain?
Lori - NASM
Independent contractor & liability
I have my own LLC for teaching group fitness. I have a high demand for my classes and I am looking at hiring another instructor to cover some of my classes. I don't plan to hire this person as an employee but as an independent contractor. My question is do they need to carry their own liability insurance or are they covered under mine?
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