You actually need both to set your business up as a corporation or LLC and to maintain e & o insurance. They both protect you against differing liabilities. The corporate shield or the LLC's equivalent will protect you against liability on contract claims so long as you observe all the formalities in signing the contract and performing the contract. The corporate shield in most states will not protect you against negligence and intentional torts. In states such as Connecticut tortious conduct is not within the scope of corporate employment for officers and directors, and someone involving himself in tortious conduct either in his personal capacity or his representative capacity is personally liable. The e & o insurance will most likely not protect you on contract claims or intentional torts. The insurance is designed to protect you for negligence in performing a search.For many torts claims there is also a contract law corrolary. Tort claims generally have a shorter statute of limitations than contract claims. Consequently,you could find yourself being sued for contract breach for a bad search

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