LLC or LLP ..?

[DonP]

E&O won't protect you from employment lawsuits. E&O also won't protect you from accusations of fraud (criminal activity).

For that example, that was an employment dispute which, yes, can easily be done personally and the business entity.

It will be up to the COURT to enforce how a punitive judgment is enforced and collected, not how the lawsuit is charged. The court should limit the liability to the entity... unless there's other accusations like sexual harassment, etc. (Not legal advice)

Correct I'm just using that as example of how anyone personally can be sued . That's why a llc in insurance is flimsy protection for an agents personal assets .

 

[sman]

Correct I'm just using that as example of how anyone personally can be sued . That's why a llc in insurance is flimsy protection for an agents personal assets .

Only reason I am set up as an LLC is for the S Corp treatment related to taxes.

 

[annon123]

Correct I'm just using that as example of how anyone personally can be sued . That's why a llc in insurance is flimsy protection for an agents personal assets .

The legal form you choose for your business also affects if your personal assets are protected in any kind of suit. For example if you are a Sole Proprietor you can lose the shirt off your family's back, house, etc. as business and personal assets are intermingled. The small business administration can help you with that and talk about the pros and cons of each business form.

 

[MedicareMutt]

I 99% agree, but not 100%.



I think it is still can be worth it, at some point.

Not all actions are "malpractice", so to speak. You still have liability associated with the office, advertising, employment, pollution, etc. It is not at all clear to me that the lack of a liability shield for agencies applies or does not apply to such things. [I am not an attorney.] Plus a lot of agencies buy their office buildings.

Its the same thinking of why agencies need not just a PL policy but a GL policy, and even a Cyber policy.

Additionally - Once your Agency is Large Enough - Incorporating is a real sign of credibility for a small percentage of clients. There 'may' also be a value to it if you wish to sell the business at some point.

For the tax related items - I would lean on your CPA to get a detailed answer.

Like 85 bucks to form an LLC. in Ohio ... and yes, write off dat gum near everything ...

 

[DonP]

The legal form you choose for your business also affects if your personal assets are protected in any kind of suit. For example if you are a Sole Proprietor you can lose the shirt off your family's back, house, etc. as business and personal assets are intermingled. The small business administration can help you with that and talk about the pros and cons of each business form.

That's why insurance agents have $1/$3 mil E@0 . Your 10 million times more likely to be sued outside your ins business like hitting someone in a car than being sued selling life or health . I agree p@c your have much greater exposure. Let's say you llc holds up against personal exposure . In Medicare and p@c you have potentially millions of dollars of future renewals exposed in your llc

 

[marindependent]

Pollution... really? Okay.

In California - Carbon is considered Pollution.

 

[PrivClientSG]

If you are that concerned about liability, asset protection, etc., then talk to a qualified attorney. That said, as pointed out, E&O for you, individually, covers your actions as a licensed individual producer. E&O for your entity would do the same for the entity. It will not offer any coverage or protection for operations aspects of either -- like sexual harassment, employment, etc. Setting up an LLC to operate a Hallmark store is very different than an LLC to operate an insurance firm or agency. An LLC cannot protect your own individual activities as a (licensed) insurance producer, hence the reason for E&O.

 

[pogo]

My understanding is that a LLC makes succession easier. If I died, commissions would continue to my LLC and a new agent could be designated for the LLC. Without the LLC, the commissions would simply stop. This would also apply if I did not maintain my insurance license for whatever reason—disability, retirement…

(Neishloss and Fleming had a video on this, but I can't find it now.)

 

[DHK]

Commissions can continue if there is a beneficiary to receive them on file with the insurance company, regardless of business entity.

 

[MedicareMutt]

Commissions can continue if there is a beneficiary to receive them on file with the insurance company, regardless of business entity.

Would that beneficiary need to be licensed? I am thinking yes. My wife has her license.