I run a small web design shop as a single-member LLC. No employees, no office, just me and my laptop. My cousin keeps telling me I need general liability and maybe E&O. It feels like overkill , who's going to sue me, a client who didn't like their logo? But I also don't want to lose my house if something goes sideways. Do I really need insurance, or is it just something agents push?
Solo Business
Does a one-person llc really need business insurance?
Depends on your contracts. If you have a client agreement with indemnity clauses, insurance can be the thing that keeps youu from personally covering a legal defense. Not overkill if you're working with bigger companies. They often require it before they'll sign.
The LLC protects your personal assets in theory, but in practice if you're the only one doing the work, a plaintiff can argue you were personally negligent. Insurance at least covers the defense costs, which is often the bigger hit. Not saying you definitely need it, but it's less about the lawsuit and more about the cost of responding to one.
What kinx of web design? If you touch client data or handle any part of their checkout, you might want to look at cyber liability too. That's the one that actually worries me for solo folks.
Mostly static marketing sites, a few WordPress builds. No payment processing on my end. I did have a client last year ask me to sign their vendor agreement and it had a $2M insurance requirement. I just skipped it because it seemed like a hassle. Maybe that was a mistake.
Skipping the vendor agreement because of the insurance requirement is probably going to cost you more than the policy would have. Small B2B contracts are where that stuff shows up constantly. A basic GL policy for a solo web person is usually a few hundred a year, not thousands. Worth pricing out before you decide it's overkill.
Also check what your homeowner's policy already covers. Some umbrella policies extend to home-based businesses, but usually with exclusions. It's not the same as a proper business policy, but it might cover a small claim. Worth asking your agent specifically about business activities, not just vaguely.
I'd separate the two things. General liability is for physical stuff — someone trips in your space, or you damage their property. E&O is for the work itself being wrong or late. For web design, E&O is the one that that actually matches what you do. A lot of people buy GL because it's cheap and then think they're covered for everything.
The vendor agreement thing is a real signal. If one client asked for it, others will. And if you're turning down work to avoid paperwork, that's a business decision you're making without knowing the actual cost. Get a couple quotes. If it's $400 a year, that's not a hard call.