[thelist] OT - small side job - Do I need liablity insurance?

deke web at master.gen.in.us
Mon Apr 1 18:25:01 CST 2002

On 1 Apr 2002 at 17:06, Samir M. Nassar posted a message which said:

> Wouldn't a Limited Liability Corporation give you those same protections
> as one would get for insurance.
> In the end it would be your LLC that is liable, and not you, since
> technically you are the employee.
> Or am I interpreting this the wrong way?

> I am asking because I am considering setting up an LLC and I am
> wondering if it is worth it, especially vs. insurance.

All corporations are limited liability corporations - but the value of
incorporating,  to a lone eagle in a service business, is pretty

The fact that a corporation can be held liable for the actions of
employees does *not* mean that the employees are not liable for their
own actions. Someone who is harmed can sue either employer, employee,
or both.

And even if you have employees, you aren't entirely off the hook
personally for what *they* do, because you have an exposure as a
corporate *officer*, not just as a stockholder.

If you are a lone eagle, working out of your spare bedroom, and do not
receive customers in your home, there's not much liability involved.
You *do* have the possibility of running into a school bus of kids
while driving to see a client, however. If this milage is limited, your
auto agent may be able to cover this for relatively little money. (I
wonder how many people don't bother, though, claiming it was a shopping
trip, though, when they actually were on the way to a client.)

An umbrella policy is *not* a substitute for business liability
insurance. Umbrella policies pay for losses in *excess* of underlying
policies - and a *personal* umbrella policy only covers *personal*
liability, not professional liability.


*Any great truth can -- and eventually will -- be expressed as a cliche
-- a cliche is a sure and certain way to dilute an idea. For instance,
my grandmother used to say, "The black cat is always the last one off
the fence." I have no idea what she meant, but at one time, it was
undoubtedly true. --
                       Solomon Short

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