Protecting your business & personal assets – at the same time

Protecting your business & personal assets – at the same time

Today we feature an article from a personal friend of mine, Jim Betinol, who is also a business associate of mine as well. He is a partner at the law firm Withrow & Betinol Law. I have asked him to write an article educating people on the importance of business insurance AND doing business under a corporation or LLC. Notice how I emphasize the word “AND” – because it is not simply enough to have one without the other. Jim can be reached @ 424-229-2560, & visited @

Why you should have both a limited liability entity (LLC, Corp) and business insurance.

Many business owners mistakenly believe that there is no reason to have both business insurance and a limited liability entity like an LLC or a Corporation — that business insurance will provide enough protection so an LLC or a Corporation is unnecessary.  This misconception puts many business owners, their homes, savings, and financial security at risk. 

For example, if a customer is injured at your place of business or due to your services, including unintended injuries (i.e. slipping on a wet floor, a driver accident, construction materials falling on the customer, or a mistake made by one of your employees causing property damage, etc.) there is a strong chance that a lawsuit will be filed.  Most business owners have the foresight that these types of situations may occur, which makes obtaining strong business insurance with policies that provide coverage for the types of risks that are likely to happen a must.

However, as medical costs increase, business owners have to pay for higher and higher damages, which may be beyond what is covered by insurance.  When your insurance coverage runs out, this is where your life savings, home, and other personal property could be at risk — and were having a limited liability entity step in. 

The benefits of having a limited liability entity, such as an LLC or a Corporation, is that they shield your personal assets and keep them separate from your business assets.  This means when a business liability arises you do not have to worry about the damages affecting your life savings or personal assets.  A limited liability entity generally limits personal liability to cases in which you personally cause harm, guarantee a loan, intentionally act with recklessness, or fail to maintain the LLC or Corporation. 

A properly planned and operated limited liability business can provide:

  • Asset Protection by limiting liability to the assets of the business:
    • For business owners with multiple businesses, this can mean that losses in one higher risk business will not affect the other businesses;
    • For all owners, it will help protect your lifesavings, home, and other property.
  • Potential Tax Savings by reduction of self-employment taxes.
  • Flexibility when bringing in new investors or when selling your business. 

This article should not be taken as legal counsel and readers should not base any legal decisions solely on the article without consulting an attorney.  Legal decisions must be approached on a case-by-case basis as your situation may require specific requirements.  For additional questions, feel free to contact the author at

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