Best way to protect personal assets when freelancing?

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TheAccountant
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Best way to protect personal assets when freelancing?

Post by TheAccountant »

I've been asked numerous times over the years to help others with their small business bookkeeping. This year I've decided to take on the role on a part-time basis.

I'm trying to figure out the best way to protect my personal assets (retirement, home, etc.) from litigation. An LLC seems like a huge pain in the rear to setup for something like this.

So basically I'll be doing small business bookkeeping, and probably re-selling some stuff on ebay with a small inventory.

Would insurance cover me if I did bookkeeping for someone and they tried to sue me for everything I have because I put a number in the wrong place or something?

Any feedback would be much appreciated.

Thanks in advance.
denovo
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Re: Best way to protect personal assets when freelancing?

Post by denovo »

Talk to an insurance broker that specializes in business lines.

But I would this to give you a baseline of knowledge. [read the whole thing]

https://en.wikipedia.org/wiki/Professio ... _insurance
"Don't trust everything you read on the Internet"- Abraham Lincoln
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TheAccountant
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Re: Best way to protect personal assets when freelancing?

Post by TheAccountant »

denovo wrote: Tue Sep 18, 2018 2:44 pm Talk to an insurance broker that specializes in business lines.

But I would this to give you a baseline of knowledge. [read the whole thing]

https://en.wikipedia.org/wiki/Professio ... _insurance
This is what I plan on purchasing.

The only thing the insurance doesn't cover is creditors coming after you for unpaid bills. :moneybag
denovo
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Re: Best way to protect personal assets when freelancing?

Post by denovo »

TheAccountant wrote: Tue Sep 18, 2018 3:28 pm
denovo wrote: Tue Sep 18, 2018 2:44 pm Talk to an insurance broker that specializes in business lines.

But I would this to give you a baseline of knowledge. [read the whole thing]

https://en.wikipedia.org/wiki/Professio ... _insurance
This is what I plan on purchasing.

The only thing the insurance doesn't cover is creditors coming after you for unpaid bills. :moneybag
By the way, I don't think setting up an LLC is as difficult as you think.
"Don't trust everything you read on the Internet"- Abraham Lincoln
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TheAccountant
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Re: Best way to protect personal assets when freelancing?

Post by TheAccountant »

denovo wrote: Tue Sep 18, 2018 3:34 pm
TheAccountant wrote: Tue Sep 18, 2018 3:28 pm
denovo wrote: Tue Sep 18, 2018 2:44 pm Talk to an insurance broker that specializes in business lines.

But I would this to give you a baseline of knowledge. [read the whole thing]

https://en.wikipedia.org/wiki/Professio ... _insurance
This is what I plan on purchasing.

The only thing the insurance doesn't cover is creditors coming after you for unpaid bills. :moneybag
By the way, I don't think setting up an LLC is as difficult as you think.
It just seems like an awful lot of work for doing a few freelance gigs. Registering with the state, obtaining a business license, articles of incorporation, etc.

My main concern is liability and it seems insurance would cover that?
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TheAccountant
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Re: Best way to protect personal assets when freelancing?

Post by TheAccountant »

After researching this it looks like single-member LLCs aren't as protected as people make them out to believe. Since they're single member, it's easy to piece the corporate veil and come after the owner's assets if the business' assets don't cover the alleged litigation.

It's multi-member LLCs that are shielded like people think LLCs offer coverage - which is protection against personal assets if another member is sued.
Kennedy
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Re: Best way to protect personal assets when freelancing?

Post by Kennedy »

Technically, the term is "pierce" the corporate veil, not piece. One of the factors used to determine if one can successfully pierce the corporate veil is whether or not the business is adequately insured. Look into business insurance.
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Re: Best way to protect personal assets when freelancing?

Post by TheAccountant »

Sorry, auto-correct.
go_mets
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Re: Best way to protect personal assets when freelancing?

Post by go_mets »

TheAccountant wrote: Tue Sep 18, 2018 3:28 pm
denovo wrote: Tue Sep 18, 2018 2:44 pm Talk to an insurance broker that specializes in business lines.

But I would this to give you a baseline of knowledge. [read the whole thing]

https://en.wikipedia.org/wiki/Professio ... _insurance
This is what I plan on purchasing.

The only thing the insurance doesn't cover is creditors coming after you for unpaid bills. :moneybag

Which company are you looking into buying the insurance from?
I am thinking I need to buy some for my next gig.
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TheAccountant
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Re: Best way to protect personal assets when freelancing?

Post by TheAccountant »

go_mets wrote: Tue Sep 18, 2018 8:08 pm
TheAccountant wrote: Tue Sep 18, 2018 3:28 pm
denovo wrote: Tue Sep 18, 2018 2:44 pm Talk to an insurance broker that specializes in business lines.

But I would this to give you a baseline of knowledge. [read the whole thing]

https://en.wikipedia.org/wiki/Professio ... _insurance
This is what I plan on purchasing.

The only thing the insurance doesn't cover is creditors coming after you for unpaid bills. :moneybag

Which company are you looking into buying the insurance from?
I am thinking I need to buy some for my next gig.
I am going to get a few quotes.

GEICO offers it here: https://www.hiscox.com/partner/geico?in ... ional&zip=

I also have a connection at a local insurance agency, so I was going to reach out to him, and also State Farm since I use them for homeowner coverage and compare the three.

I do this for everything, btw. Get 3 quotes, compare services and go with whoever is the best (not necessarily the cheapest.)
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