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  1. #1
    SitePoint Member lstice's Avatar
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    Insurance for business owners

    For a sole proprietorship focusing on web design/dev. what all insurance and deductibles do you recommend for a family of 5?

    A fellow business owner told me he doesn't have dental (family of 6), and that it's a luxury. Should I get it or a discount plan instead?

    Also, is it better to have liability insurance or to write in the contracts that you're not responsible for legal issues, so they can't sue you?

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    SitePoint Wizard samsm's Avatar
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    (I'm not a lawyer!)

    You will automatically get a degree of liability protection if you change your business froma sole proprietership to an LLC (Limited Liability Corporation) or S-Corp (or a C-Corp for that matter). LLCs and S-Corps are fairly easy to form and you can do it with just one person. Both, properly run, will take you as an individual out of the legal picture in the event someone sues your business. Someone may sue your business to bankruptcy, but they won't be able to get your house and other personal property.

    Heh, I used to think that dental coverage was a luxury. Then I lost four teeth in a bike accident. That cost about $3000 (minimum) and I'll probably spend another $10,000 on that injury before I die. That said, I don't think dental is that big of a deal. The cost of whatever premiums I might pay would probably be greater that the amount I end up spending upon dental work. People have a lot less problems with their teeth than they used to. Anyway, even after my accident, I would agree that dental (unless it is dirt cheap) is probably not worth it. There are some expenses I'm not considering though, like braces, tonsil removal, etc.

    Regardless, definitely get health insurance.
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  3. #3
    SitePoint Member lstice's Avatar
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    Thanks for the quick reply, samsm.

    Tonsils? I didn't know dentists do tonsils.

    One idea suggested to me is to have a sole proprietorship, a small liability policy and transfer all the assets into my wife's name. What about that idea?

    I definately will get a health policy. (Right now I have a temporary one.) Most likely I'll go with 2500/5000 ded., 4500/9000 out of pocket for $290/month premiums. But I'm debating whether to go with 1000/2000 ded. 3000/6000 OOP for $100 more per month. Any ideas/experience on this would be appreciated.

  4. #4
    SitePoint Wizard samsm's Avatar
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    Quote Originally Posted by lstice
    One idea suggested to me is to have a sole proprietorship, a small liability policy and transfer all the assets into my wife's name. What about that idea?
    That sounds much more complex than creating an LLC or S-Corp and a lot more dangerous. In Georgia for example, last I checked, creating an LLC costs under $100.

    With an LLC or S-Corp, your business is a separate entity, no one can get to your personal assets unless your business is determined to be a shallow front for your personal illegal actions. As long as you follow some rules, that won't happen.

    Transfering assets and such sound like an attempt to skirt the law which seems pointless as there is an established procedure for protecting your personal assets. Also, I wouldn't be sure that assets would be safe in your wife's name, the two of you could be considered to share all your property... I think that's how it works in some states, don't really know (I'm not married or a lawyer!).

    Quote Originally Posted by lstice
    Tonsils? I didn't know dentists do tonsils.
    Yeah, I guess not. :)
    I was thinking of molars and got carried away (and really it would be an oral surgeon who would do molars, don't know if that's in a dental plan or not). My point was, if you foresee three children each requiring an expensive proceedure that falls under the canopy of "dental coverage" then it may be worthwhile. Braces are probably in that category.

    As far as medical coverage goes, it all depends on who you are, where you live, what company you are asking for a plan. My personal plan is just for myself, a young male which is about as cheap as coverage gets so I really don't have perspective on family insurance.

    However, you should check out Kaiser Permanente, they do insurance in Ohio. They are very highly regarded in California and they are pretty good in Georgia too. It's HMO-style coverage but they do it better than just about anyone, I hear.
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