LLC vs DBA - Do designers get sued?

Hi everyone…

I am fully versed on the differences between the sole proprietorship, corporations, and the LLC. Therefore, I am not looking for any information or advice on business structure.

But, I am curious to learn more about web designers and programmers who operate entities without personal asset protection. It seems most operate as sole proprietors and may or may not carry liability insurance.

So, quite simply: Do web designers get sued often? I realize in our litigious society bizarre circumstances arise. But, on average, does a DBA designer have reason to believe his/her personal assets are on the line?

Real world stories and examples would be appreciated!

Thanks.

  • Brian

I think it varies.

Except for contract disputes, etc. I doubt there is much litigation amongst designers. I think that most ( but not all) web designers don’t do the kind of work that could result in substantial material damages.

For developers it can be different. If you are handling transactions and a lot of money is going around, you could make an expensive mistake.

When you get into full blown software efforts with bigger budgets you start to need errors and omissions insurance, general liability, maybe umbrella insurance.

So, to answer your question: it depends on what you are doing. I think you right that many designers don’t have much structure or insurance but the more experienced ones do.

On public sector project (which is all I’m doing lately) it’s usually required - you need x million dollars of E&O, a bunch of general liability, and workmans comp in most states ever if you are independent.

I hope not, but I also don’t feel entirely comfortable acting as a sole trader with no insurance. A LOT of web design work is for online stores and anything with currency and / or personal data seems like a huge potential liability.

So I’d be interested to know, as well!

Thanks guys…

I appreciate the input.

Also, based on the lack of replies, I’m assuming not too many people have horror stories to share…

Thanks again.