What to do about fitness instructor liability insurance an an independent contractor?

My wife is going to be a fitness instructor at a local fitness center and is going to carry personal liability insurance that will cover her in case she is ever sued. However, I do not want to be in a position where she is also sued personally outside of the insurance coverage. Should she set up her own LLC and still work as an independent contractor for the fitness center so that the LLC will take all of the liability if she were ever sued and so that our personal assets will not be at stake?

Asked on July 24, 2012 under Business Law, Texas


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Setting up an LLC and working through it will help protect your and your wife's personal assets from business-related liability--e.g. breach of contract, business debts, or--if your wife's business expands to the point where she has people working for--acts of other LLC employees. But it will not nessarily protect from tortious acts committed directly by your wife. For example: say that your wife is training someone who has impaired flexibility and while helping him/her stretch, stretches a limb too far and causes tendon or ligiment damage. That would arguably be a negligent act performed directly by your wife; she could be sued personally regardless of who she is working for, whether she has her own LLC or not, etc. Therefore, having an LLC will help against certain liability, but will not protect against injuries caused directly by your wife. Having amble insurance is therefore a very good idea.

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