LLC vs. Liaibilty Insurance

[JSCArmy]

What is the name of your state? Maryland
My wife is starting her own family child care business in our home. I have been getting conflicting advice from a number of people in regard to protecting our personal assets (none of them lawyers or familiar with insurance or liability). Some have said that we should form an LLC; the argument being that it will protect our personal assets should a child be seriously injured while under her care and it is cheaper in the long run than liability insurance which will only partially protect us if we do not purchase enough coverage. Some have said that we should purchase substantial liability insurance instead; the argument being that because the business is being run in our home and any serious injury would probably be blamed on personal negligence on our part (legally anyway) not only would our business be liable but we would be personally liable as well so our LLC would no longer protect our personal assets. I have no idea if this is true. Thank you for any assistance you can provide.

[tranquility]

Both opinions are true as protecting against "risk" depends upon the risks you're trying to protect yourself from.

I'd get organizational protection (like an LLC), with a good business insurance and then have strong personal homeowner's insurance with a big umbrella policy to eliminate as much risk as most encounter in the type of business you are contemplating. To explain why each thing is necessary takes more time than I want to spend right now, but good protection requires both strategies and not just one.

[moburkes]

Make sure that the HO insurance companies knows about the business. They might drop you.