LLC + General E & O or Signing Agent E & O

Law Related
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Fairly new signing agent with some legal questions here!

(A disclaimer: I’m aware that most people here are not lawyers, and any advice should be taken with a grain of salt and verified with an actual lawyer)

I am in contact with a company who wants $100k Errors and Omissions Insurance, so I’m upping my coverage from my existing $30k general E and O policy. I am allowed to have either general E and O, or signing agent specific E and O.

In my state (Texas), a 100k general E and O policy for a year is $70, and a signing agent specific one is $360 for a year. That’s 5 times as much. I am a new NSA, and while I can cover the $360, I am already running in the red, and I’m hesitant to take out a few hundred dollars.

My question is: if I declare an LLC, will that protect my personal assets in the same way that a signing agent E and O would?

It would be roughly the same upfront cost to get a general 100k E and O ($70) and declare an LLC ($300 filing fee, no recurring fees)than it would be to get a signing agent policy for a single year ($360). I would have a smaller recurring fee.

This makes financial sense, I am just curious to see if it would have the same protective affect as the signing agent insurance.

I keep searching for a comparison of these two options, but I’m just finding information on LLCs and signing agent insurance separately… I value your thoughts, opinions, and experiences on which option you would recommend! (As noted above, I will find a qualified legal professional to verify any claims)

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So first off, I am not a lawyer so this is not legal advice. This is what I have and how I interpret what I have. My business is an LLC. An LLC is a business “structure” not an insurance policy. Therefore, your “business” still needs to be “insured” (I tried to keep that as simple as I could). As I interpret MY LLC, it protects my personal assets should someone file suit against me, hence they can only pursue my business assets, not my personal assets. And the only reason they would be going after my assets at all is if my insurance policy didn’t cover the cost of the claim for damages. So bottom line… LLC or not, you still need insurance. Your either insuring yourself or your business. Hope this helps.

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LLC - Limited Liability Corporation
SMLLC - Single Member Limited Liability Corporation

Sole Proprietorship = SMLLC IRS business tax language.

SMLLC pays personal taxes with their business taxes.

Sole Proprietorship pays personal taxes separate from their business taxes.

E & O Insurance is Error and Omission Insurance which is required in most states, however there are also Notary Bond Insurances, but shop around and look up what your state’s minimum requirements are, because your paying to much for an annual policy.

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Update, just bit the bullet and got the Signing Agent E & O!

Just got BiBERK for E and O insurance that includes signing agent coverage. $31 a month for $100,000 per claim, $300,000 aggregate, $500 deductible policy! (I live in Texas)

It may be useful for others to know that BiBerk has a good cancellation policy. I chose monthly billing of $30 a month instead of paying the entire year’s premium of $400 upfront. If for any reason I need to cancel the policy, I can do so for a relatively minor fee

(The insurance rep on the phone said the cancellation fee is 10% of how much I’ve already paid in the policy. If I’ve paid 3 months, the amount i’ve already paid is 9x30 or 270, so I would pay 10% of the 270, which is $27 )

As a new NSA still learning the ropes, I appreciate this policy’s flexibility, so I can cancel it if it turns out its not the right for for me.

While I value the experiences of experienced notaries who’ve had flourishing careers without signing agent insurance, I am personally glad I chose to bite the bullet and get the extra signing agent protection.

If nothing else, I feel more confident with the extra protection. I made a mailing error last week, and I’ve been so anxious about it that I declined some appointments this week that I could have taken.

This obviously varies with one’s experience and location, but I’m personally okay with parting with $30 a month

Probably going to file an LLC in the near future also, because it never hurts to be extra careful with one’s assets. Thank y’all for clarifying some LLC information, it’s been helpful!