How much liability does one carry after the dissolution of an LLC? Specifically I am wondering about after retiring and shutting the office down, would you still need to carry professional liability insurance?
wouldn't your liability insurance be in your name instead of your LLC's name, since you signed the drawings (rather than having your company's name sign the drawings)?
i don't know, so maybe someone else will post, but my thought process would lean towards thinking you should keep your insurance in case something you personally signed has a problem. you aren't talking about insurance on office equipment.
also, i would think asking your insurance provider would be more beneficial than asking people you don't know on an internet forum.
edited after i clicked your name: why are asking? your profile looks like you just got out of school. why would have professional or personal liability in the first place?
I like knowing things. The liability insurance would be in the architect's name yes, and that person would be required to maintain it through the statute of limitations?
The world will probably blow up before I ever get a chance to find out for myself, but I was just wondering.
If the LLC is dissolved, you do still need to carry personal liability insurance for work you did as a professional of record for the LLC, for whatever the statute of limitations is on whatever you might get stuck for. If it's condo/residential work, that can be a long time.
The coverage you want to ask about is a "tail policy" -- which covers professional liability exposure once a firm closes its doors and through the term of the appropriate "statute of limitations" or "statute of repose" -- it's my understanding that the cost of a "tail policy" per year is less than the annual policy cost while a firm is operating.
If the firm remains active after the retirement of a partner, typical E&O policy language will cover retired partners, as well as active partners, after someone leaves. I understand that no additional premium is required to cover retired partners in a situation like this.
If a partner retires and the firm continues for a while, but later closes, then the retired partners (and the out of work partners) will need to arrange continuing coverage through their insurance carrier.
Mar 20, 13 4:29 pm ·
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LLC Personal liability after dissolution
How much liability does one carry after the dissolution of an LLC? Specifically I am wondering about after retiring and shutting the office down, would you still need to carry professional liability insurance?
wouldn't your liability insurance be in your name instead of your LLC's name, since you signed the drawings (rather than having your company's name sign the drawings)?
i don't know, so maybe someone else will post, but my thought process would lean towards thinking you should keep your insurance in case something you personally signed has a problem. you aren't talking about insurance on office equipment.
also, i would think asking your insurance provider would be more beneficial than asking people you don't know on an internet forum.
edited after i clicked your name: why are asking? your profile looks like you just got out of school. why would have professional or personal liability in the first place?
I like knowing things. The liability insurance would be in the architect's name yes, and that person would be required to maintain it through the statute of limitations?
The world will probably blow up before I ever get a chance to find out for myself, but I was just wondering.
If the LLC is dissolved, you do still need to carry personal liability insurance for work you did as a professional of record for the LLC, for whatever the statute of limitations is on whatever you might get stuck for. If it's condo/residential work, that can be a long time.
i think "statute of repose" rather than "statute of limitation"
nice explanation from the fine folks at aia (pdf)
some random source that might explain your state's length of statute of repose and limitation (also pdf)
Cool, thanks.
The coverage you want to ask about is a "tail policy" -- which covers professional liability exposure once a firm closes its doors and through the term of the appropriate "statute of limitations" or "statute of repose" -- it's my understanding that the cost of a "tail policy" per year is less than the annual policy cost while a firm is operating.
If the firm remains active after the retirement of a partner, typical E&O policy language will cover retired partners, as well as active partners, after someone leaves. I understand that no additional premium is required to cover retired partners in a situation like this.
If a partner retires and the firm continues for a while, but later closes, then the retired partners (and the out of work partners) will need to arrange continuing coverage through their insurance carrier.
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