LLC Insurance Guide
An LLC is a Limited Liability Company. This means that if something happens to your business, your personal assets won’t be compromised. It’s like a barrier between you and your business. But even if your business is an LLC, there are still some insurance cases you should consider.
LLC Exceptions
Even though an LLC will help separate your personal assets from your business, it does not protect you from everything. Registering your company as an LLC is not equivalent to getting an insurance policy. There are some exceptions to LLC, which include:
- Acts of negligence
- Illegal actives
- Signing a personal guarantee for your loan
- Mixing personal a business expenses – not treating your business a separate entity.
- Not filing your taxes correctly
Is it the Same as Insurance?
An LLC is not the same as insurance. While an LLC can help protect your personal belongings in the event your business goes bankrupt, it does not protect you from accidents. For instance, if a fire breaks out, then your LLC will still experience property damage. There are also legal instances where your LLC will not protect you. If you take out an excessive amount of loans, then you may be held personally responsible.
Why Should I Get Insurance?
Some states will require you to get business insurance even if you are registered as an LLC. Though requirements can vary by state, there are some common types that you may be required to purchase, including:
- Workers compensation
- Disability Insurance
- Unemployment insurance tax
It’s important to call your insurance agent and ask about state requirements. Your insurance agent can help you make sure that your LLC is compliant with the state laws.
Property Coverage for LLCs
One type of insurance you may want to consider getting is property insurance. Just because your company is an LLC, it doesn’t mean you’ll be protected from property damage or theft. If someone steals your company’s belongings, you’ll need a commercial insurance policy to help protect you financially. A good property insurance policy will help protect the structure of the building and your belongings. Keep in mind that property insurance does not cover flooding. If you have concerns about flooding, then you will need to purchase a separate commercial flood insurance policy.
Business Insurance for LLCs
There is array of possible business liability insurance options for your to consider when protecting your business. It’s possible to bundle those into a Business Owners Policy, or BOP. These are some liability coverage that you may want to get for your company:
- General Liability
- Product Liability
- Professional Liability
- D&O Liability
Other types of insurance to consider:
These are some other coverages that you should think about getting for your LLC. They include:
- Commercial auto insurance
- Business Disruption Insurance
- Commercial Flood insurance
It’s always best to talk to your insurance agent about the best ways to protect your business. They can help you determine the type of coverage you business needs. While an LLC will help protect your personal things from claims and lawsuits, it will not protect you from everything. Insurance helps protect your business, but not necessarily yourself. It’s important to have a commercial insurance policy in place to protect your LLC from accidents and mishaps.
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