When it comes to business insurance, one of the most common questions we hear at Eugene C. Yates Insurance Agency is:
“Should I insure myself or my LLC?”
The answer isn’t one-size-fits-all. It depends on how your business is structured, what assets you want to protect, and the types of risks you face. Let’s break it down to help you make a confident decision.
🔒 What Is an LLC—and Why It Matters for Insurance
A Limited Liability Company (LLC) is a popular business structure because it separates your personal assets from your business liabilities. This means that if your LLC is sued, your personal property (like your home or savings account) is generally protected.
But here’s the catch: that protection only works if you treat your LLC like a separate entity—including how you insure it.
🏢 Why You Should Insure the LLC (Not Just Yourself)
If your business is officially formed as an LLC, then your insurance policy should also be in the name of the LLC. Here’s why:
- Preserve Your Liability Shield: If you mix personal and business insurance, you may “pierce the corporate veil,” which opens the door to personal liability.
- Cover Business Assets: If the LLC owns property, equipment, or vehicles, your policy needs to cover those assets under the business name.
- Meet Legal and Contractual Requirements: Many landlords, lenders, and clients will require the LLC to be insured—not the individual owner.
Common types of coverage for LLCs include:
- General Liability Insurance
- Professional Liability (Errors & Omissions)
- Commercial Auto Insurance
- Workers’ Compensation
- Cyber Liability Insurance
👤 When to Insure Yourself Personally
Even if you own an LLC, there are times when personal coverage is still necessary:
- You use personal assets for business (e.g., your own car or home office)
- You’re a sole proprietor or freelancer operating under your legal name
- You want extra liability protection through a personal umbrella policy
In these cases, talk to your agent about how to bridge the gap between your personal and business coverage without risking exposure.
✅ In Some Cases, You’ll Need Both
The truth is, many small business owners need both personal and business insurance. For example:
- A delivery driver might need commercial auto insurance for business use and personal auto insurance for everyday driving.
- A home-based business owner may need homeowners insurance plus a business endorsement or a separate general liability policy.
📞 Final Thoughts from the Experts
If your LLC is running the show—signing contracts, collecting payments, and owning equipment—your insurance should be in your LLC’s name. You can always be listed as an additional insured if needed.
Still not sure what kind of coverage you need?
We’re here to help.
At Eugene C. Yates Insurance Agency, we’ve been protecting Sacramento business owners since 1946. Whether you’re just forming your LLC or reviewing your current policy, we’ll help you find the right protection—at the right price.
👉 Contact us today for a custom insurance quote.
We’ll make sure you and your business are covered from every angle.