[Wyrd Wind]

The company is an e-commerce sole-proprietorship company.
With that said, employees work from their homes.
I intend to register it as an L.L.C..

Is a General Liability Insurance Plan really a necessity considering this situation? Goods sold are third party.
Delivery methods are third party.

[coffee_kingdom]

Forming an LLC does not require you to have general liability insurance. General liability covers bodily injury and property damage. I recommend it if you will have a lot customers in and out of your shop/office. Errors & Omissions Insurance covers you if your business makes a mistake in the services offered, causing harm to the other party. This is a good idea, depending on how many assets are held under your LLC that you would like to protect in the case of a lawsuit.

[Albioncollier]

In today's fast paced world, where everyone is in a hurry to make more and more money, life is full of risks. Starting from rash driving to contaminated food products, you constantly face different types of risks.Hence, every thing need security..

[GlobalWealth]

Originally Posted by Wyrd Wind

The company is an e-commerce sole-proprietorship company.
With that said, employees work from their homes.
I intend to register it as an L.L.C..

Is a General Liability Insurance Plan really a necessity considering this situation? Goods sold are third party.
Delivery methods are third party.

The LLC will protect you from the activities of the business and if properly structured will protect the business from your personal activities. But it doesn't protect the business from the business and that is the purpose of liablity insurance. Your liablity insurance will be based on your revenue, among other things, and in your case will likely be very cheap. The liablity insurance will protect your business from an issue related to a product sold. For example, if you sell a gas grill that blows up and hurts someone, that is what the insurance would cover. I would recommend shopping around and finding a good insurance agent that can steer you in the proper direction based on your needs. Unfortunately, in today's world, insurance is a cost of business.

[rdc]

I would tend to agree...

While the LLC *may* stop any liability beyond your business assets, you must still keep in mind that if you get sued, you are going to lose your business if you have no insurance (because a lawsuit is likely to wipe out 100% of the business's assets). So while having the LLC may prevent your home and car from being taken, it won't shield your business from a major loss.

Furthermore, the value of single-member (single-owner) LLCs is still somewhat unsettled in courts--they have been (and may continue to be) disregarded, meaning you as a single owner could actually be liable for business torts etc beyond the LLC level (personally). Get some insurance.

[RiskMan1]

General Liability Insurance will protect a business from a variety of liability that they become legally obligated to pay. Ask yourself, "How will my business become legally obligated to pay something?" Yep. You guessed it... You get sued.

I don't know about you, but reputable attorneys in my area are $300+ an hour. If your business is sued how much will it cost to retain an attorney to defend yourself? What if you lose the lawsuit?

One of the biggest advantages of a General Liability policy is that your carrier in most instances will pay for your legal defense and damages up to the policy limits for covered claims. Without this coverage your legal fees and damages will come out of your balance sheet. And probably more important is if you are still operating as a sole proprietorship your personal assets become fair game since you have no corporate veil.

I won't go into the other areas of protection that a General Liability policy covers, but you can find a primer at our website (Inspire Insurance Solutions in the "insurance 101" section. I recommend talking to a reputable independent agent in who specializes in business insurance. They should be able to help you prioritize the risks your business faces and give you insights on which risks to transfer and which ones you should avoid or retain.

Good luck with you endeavors.

Chris J. Baumli, CIC
Certified Insurance Counselor

Originally Posted by Wyrd Wind

The company is an e-commerce sole-proprietorship company.
With that said, employees work from their homes.
I intend to register it as an L.L.C..

Is a General Liability Insurance Plan really a necessity considering this situation? Goods sold are third party.
Delivery methods are third party.

[Wyrd Wind]

Ah, thank you all for your insight.