Why a Corporate Liability Shield Is Not a Replacement for Liability Insurance

| posted in Blog, Newsletter

Business owners who form a corporation or a limited liability company (LLC) may question the need for the business to carry insurance given the corporate liability shield. A major benefit of these forms of business organization is that they shield the owners’ personal assets. Because of this, they may believe insurance is unnecessary but it still leaves the owners vulnerable for potential losses. A corporation is a legal entity separate from its owners. It acts as an artificial legal person. It can do the things that individuals may do, such as: Enter into contracts Incur debts Earn income Make investments…
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New Law Tightens Workers’ Comp Exclusion for Officers, Board Members

| posted in Blog

A new law has made changes to the officer exclusion for workers’ compensation in California but it could cause problems for policies that do not incept on Jan. 1. Starting in 2017, an officer can be only excluded from workers’ comp coverage if he or she owns 15% or more of the company’s stock. That’s changed from the current rules that set no ownership levels for officers and directors that want to claim a workers’ comp exclusion, which has created confusion as well as an opportunity for fraud. However, the law is written in such a way that it also…
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