Starting a business is exciting—choosing your name, filing your LLC, building a brand. But one question we often hear from entrepreneurs in Sacramento is:
“Can I start an LLC without insurance?”
The short answer is yes—you can legally form a Limited Liability Company (LLC) in California without purchasing insurance. But before you check “done” on your startup to-do list, let’s talk about why business insurance should still be a top priority.
✅ Forming an LLC: What’s Legally Required?
When you file for an LLC in California, you need to:
- Choose a business name
- Appoint a registered agent
- File Articles of Organization with the Secretary of State
- Pay the filing fee
- Draft an operating agreement (recommended)
- Get an EIN from the IRS
Nowhere on that list is business insurance required—at least not during the setup phase. So, yes, you can form an LLC without insurance. But here’s where things get real.
⚠️ Why Insurance Matters Once You’re in Business
While your LLC status offers some personal liability protection, it doesn’t cover your business from:
- Customer slip-and-falls
- Property damage
- Professional mistakes
- Cyber threats
- Employee injuries
Without insurance, you’re still exposed. Your LLC won’t protect you from lawsuits that exceed your business assets, nor will it help you rebuild if you suffer a loss.
🛡️ Types of Insurance to Consider for Your LLC
At Eugene C. Yates Insurance Agency, we help Sacramento business owners find affordable, comprehensive coverage tailored to their operations. Some common policies include:
- General Liability Insurance: Covers bodily injury and property damage. Essential for most small businesses.
- Professional Liability (E&O): Protects against claims of negligence or mistakes in your services.
- Workers’ Compensation: Required by California law if you have employees.
- Commercial Auto: Covers business vehicles.
- Business Owner’s Policy (BOP): A money-saving bundle of general liability and property insurance.
🏢 Do You Rent Office or Retail Space?
Most Sacramento landlords will require proof of liability insurance before signing a lease. Don’t let a missing policy delay your launch.
💬 Final Thoughts: Plan Smart from the Start
Forming an LLC without insurance is possible—but operating without it is risky. At Eugene C. Yates Insurance Agency, we’ve helped local entrepreneurs protect their dreams since 1946. Whether you’re running a home-based startup or opening your first storefront, we’ll find the coverage that fits your business and your budget.
Need a custom business insurance quote?
Call us today or request a free quote online.
Let’s make sure your LLC is protected from day one.