A limited liability company, or LLC, is a type of business where the owner and their business obligations are kept separate. If an LLC is sued, the owner's assets are protected. LLC insurance protects the business from most types of liability that may arise out of the business's day-to-day operations. With sufficient LLC coverage, you could pay for these costs out of your pocket. This could be financially devastating for both you and your business.
LLC insurance covers most types of business liability claims. Your employees, products, or business cause bodily injury and property damage claims. With an LLC, your personal and business assets are maintained separately. If your business is sued, the company's assets are only available. Your LLC insurance will protect them if legal action is taken against your company.
Without LLC insurance, your company must pay any liability claims out of pocket. Most businesses, small ones, cannot afford to pay for liability claims. Certain types of businesses may be required to carry specific types of liability insurance. This includes state-mandated workers' comp insurance. LLC insurance reduces the risk of losing your assets and your business. It will also cover any legal costs you may incur if you are sued.
Two key types of liability insurance coverage are beneficial when protecting your business assets. Professional and general liability coverages are incredibly beneficial when keeping your business safe from financial loss.
Professional liability insurance protects your LLC if you make a mistake while working professionally. This type of insurance is called E&O coverage. Errors and omissions coverage will protect you if a mistake results in a loss for your client. E&O insurance will cover your client's losses and any legal fees you may need.
General liability (business liability insurance) protects you from bodily injury or property damage claims filed against your LLC. These damages often occur away from the location of your business. This also includes product liability associated with items or products your LLC sells or uses.
Depending on your business type, specific types of liability insurance may be needed to protect yourself sufficiently. Commercial auto, business income, workers' compensation insurance, and commercial property insurance can all be beneficial. Not all businesses need every type of liability coverage. Although workers' comp insurance is mandatory by state law, a business may not need it if it only has one or two employees.
The cost of your LLC insurance will depend on your claims history, how many employees you have, where your business is located, and its average yearly revenue. Call your insurance agent to get an accurate estimate of how much LLC insurance you need.
LLC insurance is a crucial safeguard for businesses, protecting against liability claims that could otherwise lead to financial devastation. Professional and general liability coverage and other specific types of insurance ensure that your assets and business remain secure. LLC insurance costs vary based on factors like claims history, employee count, location, and revenue. It's best to consult with an insurance agent to assess your specific needs to provide adequate coverage.
If you have questions about LLC insurance and want to find out what types you need, contact us or call Reata Insurance Group at 512-420-9333 and speak to one of our knowledgeable agents. We have the answers you need and can give you an accurate quote on a quality insurance policy for your LLC.