Can a DBA under an LLC be excluded from professional liability insurance?
I’m an interior designer and my husband runs a remodeling contracting business. We merged our operations under one LLC for tax purposes, with my company (A) listed as the main entity and his company (B) functioning as a DBA under that LLC. However, we’ve encountered challenges while trying to obtain professional liability insurance for both businesses; we successfully secured general liability coverage for both, though.
Since my husband doesn’t require professional liability coverage, I’ve been able to get a policy solely for my business. However, it lists “Company A LLC DBA Company B” as an exclusion. The insurance company assured me this is acceptable, but I’m worried about whether my LLC is still covered since “Company A LLC” is the primary insured. Can anyone clarify this for me? I hope I’ve explained the situation clearly!
It sounds like you have a unique situation with your businesses under an LLC structure. To address your concerns:
Understanding Liability Coverage: Typically, professional liability insurance covers claims arising from errors, omissions, or negligence in the course of providing professional services. Since you are the interior designer in this scenario, it makes sense for you to have a separate professional liability policy in your name.
Insurance Exclusions: The exclusion of “company A LLC DBA company B” on your professional liability policy means that claims related to the remodeling work or any professional services provided under your husband’s DBA may not be covered under your insurance. However, claims related to your work as an interior designer should be covered under your professional liability policy as long as the coverage is appropriate and you are named as an insured party.
LLC Coverage: The important thing here is to ensure that the LLC itself is protected. With you being the named insured under your professional liability policy, it may offer protection related to your work as an interior designer, but the exclusion regarding the remodeling work means that the LLC may not have coverage for claims that stem from services related to your husband’s DBA. You should verify with the insurance company how this exclusion may impact the overall liability of the LLC, especially if any claims arise that may involve both businesses.
Consulting with an Insurance Professional: It might be beneficial to consult with an insurance agent or a legal advisor who specializes in business insurance. They can offer guidance tailored to your specific situation and help clarify any remaining concerns, ensuring you have adequate coverage for both your business and your LLC as a whole.
In summary, while it seems your personal professional liability should cover your work as an interior designer, you’ll want to ensure the LLC has adequate coverage and understand the implications of the exclusion related to your husband’s DBA.