Just how "exposed" am I??

Oklahoma: Just incorporated as an S-corp. It's a service business that will never have more than $5000 in assets. My insurance agent says I need $500,000 in General Business Liability insurance and that "that's not very much" but it is very expensive! Here's the question: Does the s-corp create a liability "firewall" to protect personal assets? or Is there any scenerio that my personal assets would be at risk?

Point of claification: I'm willing to put the $5000 at risk in the case of a law suit. ( I could be back in business in 2 days with a credit card if I had a judgement against the business and had to sell all the assets.) There is almost no chance of damage to customers property or persons--my main concern would be from someone working for me (but they are all run through a temp agency with worker's comp, payroll, etc. thru them.)

The S corp can shield you from personal liability if you follow all the formalities of corporations and if you are not undercapitalized, and if you do not mix your funds with its funds. In other words, it will shield you if you do it right. Unless you know a lot about corporations and “piercing the corporate vail,” I would suggest you consult a corporate law attorney to advise you on how to proceed with this.

As for the liability insurance, the amount you need depends on what the business does and how well you conduct the corporation. Sometimes an insurance agent will exaggerate the amount of protection you need. That would also be a good thing to discuss with the corporate law attorney.