1. Liability of the LLC- The searchers are shareholders of a corporation or members of an LLC.
The corporation or LLC has a separate legal identity from the searchers. The searchers are not employees of the corporation or LLC, but remain independent contractors with respect to the work they perform. The corporation only markets their services and assigns the work out. Depending on the laws of the state in which the work is performed the corporation or LLC would not be vicariously liable for the negligence of the searcher so long as it selected a qualified searcher to perform the work. At least that is how it is here in Connecticut. I am sure there are other states in which the same rule of law applies. It developed out of several hundred years of English common law. However, that being said, it would be a good idea for the corporation or LLC to have liability insurance. I can't think of a corporation that I have incorporated that does not have it. Cost is a matter of shopping it around to the insurance agents, and coming up with the most affordable insurance policy.

2. Lack of Choice- I would think that we would have to place some qualifications on those buying in. Possibly 2 or 3 years experience plus they carry e&o insurance in an amount that is acceptable to the title companies with which we are doing business. Usually a face value of the policy of $1,000,000.00 is acceptable to them.Further limitations for a searchers poor perforamance could possibly be built into the corporate by laws or the management agreement required in an LLC. Perhaps a reduced level of assignments.

3. As mentioned above the searchers perform the searches as independent contractors. There is no change from the way the currently conduct their business.

4. Further discussion is needed on your fourth point, and a consensus needs to be reached with the participating searchers.

5. Competition- Yes, I think so, but this is the work of the marketers...to find ways to compete and still allow us to charge the prices we want. If you can find a way to couple the allocation of work to our business entity with a cost savings to the client our service becomes attractive

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