Limited Liability Company (LLC)
A limited liability company (LLC) is a business structure that legally separates the owner's personal assets from the business's debts and liabilities, while allowing profits to pass through to the owner's personal tax return. The Allen Thomas Group works with LLC owners to make sure their insurance actually backs up the liability protection their business structure is supposed to provide.
What an LLC Actually Protects
Forming an LLC generally shields an owner's personal assets, home, personal savings, personal vehicle, from being seized to satisfy a business debt or lawsuit judgment. It does this by treating the LLC as its own legal entity, separate from the individual owner or owners (called "members").
Where the Protection Ends
- It does not protect against personal negligence, such as an owner personally causing an accident while working
- It does not stop the LLC itself from being sued or losing business assets in a judgment
- Courts can "pierce the corporate veil" and reach personal assets if the owner mixes personal and business finances or fails to maintain the LLC properly
Why Insurance Still Matters for LLCs
An LLC protects personal assets from business liabilities, but it does nothing to stop the LLC itself, its bank account, equipment, and future revenue, from being wiped out by an uninsured claim. Business owners sometimes assume forming an LLC removes the need for liability insurance, when in reality the LLC and the insurance policy are protecting two different things: personal assets versus business assets.
How The Allen Thomas Group Can Help You
We'll help you understand exactly how limited liability company (llc) affects your coverage and cost, then shop your policy across 15+ A-rated carriers to find the right fit.
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