Becoming an Independent Insurance Agent

[trvlnut]

Well, I just know that if I owned a rental, I would put it in an LLC. It will protect my other assets if someone fell and was hurt and then I was sued. Just wondering if I am sued, will an LLC offer me an additional layer of protection beyone my E&O coverage? We live in such a litigious society that I don't want to put my family's assets at risk doing this business.

 

[J.R.]

Well, I just know that if I owned a rental, I would put it in an LLC. It will protect my other assets if someone fell and was hurt and then I was sued.

Ah,, my other love in life....REAL ESTATE. Where did you find out information that a LLC would protect you assets if somebody was to fall and hurt themselves on your property. You are not entirely correct. It is a lot more complex than simply setting up a LLC on 1 or several real estate properties.....

Just wondering if I am sued, will an LLC offer me an additional layer of protection beyone my E&O coverage?

The E & O coverage should be sufficient if you are doing things ethically and honestly. Remember, somebody has to "prove" you did something to win. The only thing an LLC really does is makes it a bit more difficult to find the owner (and a few other things off the topic), but there are legal ways of knowing what you do or do not own and going after that property. Here is an introduction article on the subject of holding property http://www.johntreed.com/entity.html

We live in such a litigious society that I don't want to put my family's assets at risk doing this business.

One of the lines I use w/ some people is that "I not only protect your business and families health and assets, but I also protect my business and ability to review your options on a yearly basis by not recommending plans that are going to land us all on 20/20" Normally I get a laugh or they start going off about the media, lawsuits, etc. etc......

 

[trvlnut]

A very well known financial planner and real estate investor recommends putting all investment real estate in to its own LLC. Now, he does say that you still need insurance, but this will protect you assets including other rentals. His website is www.raylucia.com. He has a nationally syndicated radio show. He's the only financial planner that I will listen to. You can listen to archives at national business radio website. You should listen, he's really good.

Funny that you bring up John T Reed. I have a few of his "books."

BTW, I'm not trying to hide from my clients, I just want to protect our assets if I make a mistake and get sued.

 

[J.R.]

A very well known financial planner and real estate investor recommends putting all investment real estate in to its own LLC.

I would have to see the exact terminology to see what he is talking about because many guru's advocate using LLC's for various reasons that aren't accurate and unnecessary. CT just enacted a law a short time ago requiring landlords to hold title to their properties via their name and prohibited any type of corporation set-up.

MD recently enacted "foreclosure laws" making the foreclosure market tougher to navigate because too many people flooded the market with their get rich quick books and got their ass handed to them. The various entities can protect things, but it is state/area specific....especially if you live in a Liberal area.

Now, he does say that you still need insurance, but this will protect you assets including other rentals. His website is www.raylucia.com. He has a nationally syndicated radio show. He's the only financial planner that I will listen to. You can listen to archives at national business radio website. You should listen, he's really good.

Bob Bruss in California knows he stuff because he is an active investor and a lawyer. but like everything in life, you have to check the facts jack no matter the source.

BTW, I'm not trying to hide from my clients, I just want to protect our assets if I make a mistake and get sued.

You might want to rethink that approach. The only people that should know somebody's net worth is a spouse, an accountant, and a lawyer. Everybody else can get a simple, "I make a good living!"

 

[Crabcake Johnny]

You don't need LLC. From my brother being an attorney I'll give you some "lawsuit 101." Although we are indeed plagued with lawsuits most are against companies. Most person vs person lawsuit are small civil cases.

Once you establish a business entity you might actually be the target of a lawsuit that otherwise would not be filed. Why?

Attornies have their weird thing about getting paid. If they believe they have a good chance of winning or getting a settlement they'll work for a percentage of the judgement.

However, if they don't like their odd and no settlement is on the table they now want their client to pay upfront for their services. They'll also advise their client that the chances of actually getting "$100,000" out of "Joe Smith" are next to zero. Joe Smith will just file for BK.

 

[trvlnut]

Do most indies just have a sole proprietership?

 

[J.R.]

Probably depends on the their business(es),.....

 

[Res_Ipsa_Loquitor]

free legal advice: dont waste $ on setting up an LLC. 2 problems with the theory- if you alone are operating the LLC it wont do any good whatsoever.
1) Courts have repeatedly "pierced the corporate veil" and allowed the true owners to be sued.
2) the second reason people set up LLC is for tax benes... as apposed to a traditional C corp. (no flow through taxation, but you wont have that as a sole prop either). there is no tax benefit for you.

 

[Mr. Bill]

I recently went through a P&C broker to purchase General Liability (with the intent of using it for event liability).

Who do you recommend for E&O, do you go direct or through a P&C broker?

 

[Xunal]

Re: Becoming a health insurance agent

Very good information here, I read every word.

Thanks a lot!