When an entrepreneur completes the paperwork to make their business a limited liability company, or LLC, they’re often thinking the structure protects their personal assets in case of a lawsuit. As a result, they may not see the need for business insurance. The reality, however, is that securing this important coverage targets situations that may not be protected by an LLC structure. Here’s a helpful guide on what you should know.
Why Your Small Business LLC Needs Business Insurance
Personal Assets May Be Seized
Illegal activity conducted through your business can put your home, car, bank account, and other personal assets at risk—despite the LLC status. If a lawsuit is filed by a customer or vendor and it was proven that your business engaged in fraudulent transactions, the filer can still go after your assets. The same is true if you commingle your personal and business assets. Having a liability insurance policy in place covers these types of scenarios.
Bodily Injuries May Not Be Covered
If a customer or other guest is injured while on your company’s premises, they can sue you to pay for their medical expenses. Without business insurance, you will likely have to pay out of pocket. From physical rehab and wage loss to pain and suffering, the costs can be astronomical. If you don’t have enough assets to covers the costs, the injured person can go after your business assets to recoup. These include liquidating inventory, vehicles, and accounts receivable.
Employee Negligence Causes Harm
The same applies to employees who are negligent. Should you or one of your staffers fail to exercise due care on the company’s premises or time and someone is injured, the injured person can sue you. Without a general liability business insurance policy in place, all of your business assets are on the table for seizure to cover medical care. If you have coverage in place, you’re protected from confiscation of your business and personal assets.
While having an LLC structure for your company offers some protection, it doesn’t extend far enough in certain liability situations. Farm Bureau of Mebane-Caudill Agency in Mebane, NC, specializes in helping firms secure the business insurance needed to protect their operations. With its personalized attention, accessibility, and a team of experienced and local agents, the agency stands out across North Carolina. In fact, the agency won the Mebane Enterprise 2018 Reader’s Choice Award for Best Insurance Company in Mebane. To start putting together your perfect coverage, get a quote online. You’ll also find extensive information on the full suite of products and services. If you have questions, call (919) 563-3276 to speak to a friendly agent today.