I’m a therapist. I have malpractice insurance. Do I need an LLC as well? My private practice is small 8-10 patients.

I’m a therapist. I have malpractice
insurance. Do I need an LLC as well? My
private practice is small.. 8-10

Asked on June 5, 2016 under Business Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Malpractice insurance, up to the limits of the policy, protects you from malpractice. But suppose you default on your rent--the landlord could sue you. Suppose that you accidently lose control of a client's check and someone uses the data on it to steal money--you could be sued. A distraught patient/client punches a framed picture in your office and gashes tendons in his hand; he sues you on the basis that it was irresponsible to have glass in a place where there are emotionally distraught patients (simple negligence, not professional malpractice). I could go on, but the point is, there are many potential sources of liabilty other than malpractice; conducting your business as an LLC will help protect from many of them.

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