Legal-Ease: Extra insurance or LLC? Both

Lee R. Schroeder is an Ohio licensed attorney with Schroeder Law LLC in Ottawa. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at or at (419) 523-5523. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.

While it may seem logical to get more insurance rather than establishing an LLC, it’s clearly improper once someone understands the true purpose of a limited liability company. Most businesses should have both good liability insurance as well as a complementary business structure to go with the insurance. It’s best to think of an LLC as being insurance beyond traditional insurance. LLCs offer protection in the worst situations when traditional insurance would cover only part or none of the damage.

I recently heard someone advise people to get more insurance instead of establishing limited liability companies. Such advice can seem logical, especially in our conservative region where we do not like to waste a single penny of our hard-earned money. However, advising insurance instead of an LLC is clearly improper once someone truly understands what LLCs are designed to do and not do.

Insurance and LLCs are not mutually exclusive. Almost all businesses, including farms, should have both good liability insurance and a complementary business structure that also limits liability.

Read more about the need for both insurance and a good business structure in Lee’s article in the Lima News here: Legal-Ease: Extra insurance or LLC? Both

Source:, “Legal-Ease: Extra insurance or LLC? Both,” by Lee R. Schroeder, June 11, 2016

Posted in Business Law, Small Business and tagged , , .