LLC or Sole Proprietorship /Georgia

[somarco]

"Just" setting up an LLC or C corp doesn't protect your personal assets either.

E&O is mandatory with most carriers even though the chances of the policy paying are almost zip.

And no, and E&O doesn't protect you against jack sheet, especially if you are a doofus or crook.

 

[BADTROUT]

"Just" anything doenst do much... yes you can pierce the corporate veil, but combining the entity LLC or whatnot, with a good BOP, and good E&O is a layered approach better than being an individual with one or the other... hey news flash... anyone can sue anyone... there is no bulletproof solution.

 

[VolAgent]

"Just" anything doenst do much... yes you can pierce the corporate veil, but combining the entity LLC or whatnot, with a good BOP, and good E&O is a layered approach better than being an individual with one or the other... hey news flash... anyone can sue anyone... there is no bulletproof solution.

You are thinking of this as an agency owner versus a one man shop. Yes, that limited liability entity definitely helps protect you against issues caused by an employee or someone visiting your office.

For the solo agent who works out of his home and mainly visits people or does it all over the phone, it does nothing. Their liability is caused by their own actions, and there is no limited liability entity that can shield a person from their own actions.

Of course, your ownership in a corporation can more easily be separated from you than your personal commissions and renewals.

 

[BADTROUT]

You are thinking of this as an agency owner versus a one man shop

Yes I am thinking as an agency owner... I see your point for a one guy operation, but then again not 100% I still see value in creating layers of protection by carrying assets and debt in an entity versus straight to me. Can they beak it? Of course... NOTHING is impenatrable, but just the same.

 

[VolAgent]

Yes I am thinking as an agency owner... I see your point for a one guy operation, but then again not 100% I still see value in creating layers of protection by carrying assets and debt in an entity versus straight to me. Can they beak it? Of course... NOTHING is impenatrable, but just the same.

Yes, nothing in impenetrable.

Let's assume for a moment we have a P&C agent operating all alone with no staff. He receives a request to add an auto with comp and collision. For some reason he forgets to process it and the insured later has an accident that would have been covered.

Regardless of whether the agency exists as any form of corp or is a sole-proprietor, the agent is personally liable as he made an omission and forgot to endorse the policy. For the sole-prop, E&O vastly outweighs a corporation. For the life agent, I struggle to think of an instance where E&O would pay. There are many situations where it would defend, but I struggle to think of a true error or omission versus an intentional act by a life agent.

 

[somarco]

The only asset in my corp is the agency bank account. I do have computers, desk, etc but nothing of value.

The business has always had a separate checking account and commissions assigned to my agency and go into that bank account. No commingling of personal and business monies.

I have been sued once, over 20 years ago by a former employer claiming I had violated my non-compete. Took almost a year of legal battles and $20k in lawyer fees before they gave up. Case dismissed with prejudice.

Never had a client sue, report me to the DOI or complain to a carrier. Doesn't mean it won't happen in the future but I have a good track record so far.

Was sued 2x as an employee. Both of those were dismissed as well. They were also caused by agents below me doing really dumb things.

 

[VolAgent]

Was sued 2x as an employee. Both of those were dismissed as well. They were also caused by agents below me doing really dumb things.

That is the real value of a corp. Protects you from stupid acts of others. You might lose the business, but at least your personal assets are shielded, assuming they are unable to pierce the corporate veil.

 

[scagnt83]

"Just" setting up an LLC or C corp doesn't protect your personal assets either.

E&O is mandatory with most carriers even though the chances of the policy paying are almost zip.

And no, and E&O doesn't protect you against jack sheet, especially if you are a doofus or crook.

What do you suggest an agent do to protect themselves?

What combo of structure/accounting/insurance do you feel is most effective?

 

[DHK]

Document everything. Whoever has the most documented notes usually wins. Using a service like CopyTalk wouldn't be a bad idea.

 

[adjusterjack]

What do you suggest an agent do to protect themselves?

What combo of structure/accounting/insurance do you feel is most effective?

You haven't been able to figure that out from this discussion?