One of the key reasons for starting a limited liability company (LLC) is to separate your personal liability from your business operations. As a business owner, you want your personal assets to be protected in case your business is taken to the mat with a liability insurance claim, or worse – a lawsuit.
It’s essential that you find the right LLC insurance to protect your business against coverage gaps. A Trusted Choice® member agent can help you find LLC insurance coverage that meets your needs. Local member agents are familiar with your state regulations and LLC insurance requirements and will work with you to tailor a policy that meets your business needs. For professional assistance, contact a Trusted Choice member agent today.
You can be held responsible ("liable") for things you do while performing work for your limited liability company. For example, your LLC will most likely not protect you if:
Starting an LLC does not protect you from all threats. For example, a fire can break out and can damage equipment and other business property. This means that while an LLC designation can provide important protection, it does not act as insurance.
It is also important to understand a concept called "piercing the corporate veil." You can think of an LLC as a kind of barrier between your business operations and your personal finances. However, certain errors you make can allow the legal system to break through that barrier. For example, if a limited liability company takes on excessive business debt, a legal team can sometimes hold the business owners accountable for those debts.
Consulting in depth with both your independent agent and your attorney about your personal risks with regard to your LLC activities is wise, and can help to ensure both you and your business are protected.
LLC insurance requirements are set by the state government, so make sure you’re complying with state business insurance laws when you begin operation. Your required coverage may include:
Property insurance is one of the critical forms of business insurance that all companies operating from a business site should purchase. This coverage protects your business property from damage or loss due to a covered cause, such as fire. A good commercial property policy will include coverage a variety of things, ranging from the structure of your building to your personal property stored at the business site. Be sure to examine your policy closely for any exclusions.
This type of insurance is typically offered in three forms:
Note that flooding is rarely covered by a commercial property policy.
Although there are many forms of commercial liability insurance, not all will protect you or your business if you’re held responsible for certain errors. Be sure to talk with a knowledgeable independent agent who can help assess your risks and choose the appropriate coverage for your commercial operation.
Just how extensive your liability needs are depend on the type of business you operate and the risks you face. There are a few different liability insurance options for LLCs:
Of course, there are many other forms of LLC insurance coverage that you may need. If you have a fleet of vehicles, for example, you will need to purchase commercial vehicle insurance that covers all employee drivers, vehicle damage and your company's liability in the event that you or a staff member is at fault for an accident.
Additionally, you may also want to invest in business interruption insurance, which can help cover the expenses it takes to keep running your business if you’re displaced due to a building fire or natural disaster.
Costs for the insurance package you need to protect your company will vary widely based on factors such as the type of business you run and the specific types of coverages you need. Additionally, your specific LLC insurance costs will depend on how many employees you have and whether you work in a litigation-prone industry. For this reason, it's a good idea to compare LLC insurance quotes based on your unique business and risks.
Whereas a small business with few risks may only need to pay a few hundred dollars per year for adequate protection, a larger corporation can easily require protection in excess of $500,000 annually. To get accurate LLC insurance quotes that are tailored to your business risks, work with an independent agent in the Trusted Choice network who can fully assess your needs and find the right coverage at an affordable rate.
Trusted Choice member agents who specialize in commercial coverage can work with you to determine what forms of LLC insurance are best suited to your business. Don’t overpay for coverage that you don’t need. Your member agent will assist with setting the right coverage limits and finding competitive LLC insurance based on your risk factors. Find an independent agent in the Trusted Choice network today for personal assistance.