Good question - short answer is you are right.

E&O is the first line of protection.  But, what happens if the claim exceeds your limits - or you have multiple claims in a year's time that exceed your aggregate limit?  Or, what happens if the carrier denies coverage?  If for some reason, coverage is insufficient or denied you want the protection of the LLC.

And, how much time and money are we talking about?  The cost of setting up an LLC is very minimal.  And as a sole-owner LLC it is ignored for taxation purposes, so it is the same as a sole proprietorship.

Best,
Robert A. Franco
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