Are you protected?

You have set up your business as an LLC.  Is that enough to protect your personal assets if something goes wrong?

Generally, the answer to that question is a qualified “yes.”  But let’s work through some case studies.

Scenario #1
Jill is a delivery driver for Joe’s printing business.  One afternoon while out on a delivery, Jill is in a car accident.  The other party is injured and Jill is determined to be at fault.  Eventually, the other driver sues Jill, along with Joe’s business and Joe.  Should Joe be liable?

Generally, in a situation like this, Joe’s business would likely be responsible under the theory that Joe is responsible for Jill’s actions when she is actively working for him.  Joe likely has insurance to cover the loss.

But what if this happened instead?

Scenario #2
Jill is a delivery driver for Joe’s printing business.  One afternoon Jill decided to down a couple of drinks while she was at lunch with Joe.  Right after returning from lunch, a customer requested a delivery.  Knowing Jill had consumed several alcoholic beverages, Joe didn’t think twice as Jill pulled out in the delivery van.  Jill is in a car accident.  The other party is injured and Jill is determined to be at fault.  Eventually, the other driver sues Jill, along with Joe’s business and Joe.  Should Joe be liable?

In this case Joe may be found liable for Jill’s actions because even though he has an LLC, he did not exercise reasonable caution and prevent his employee from driving on company business when he knew she had been drinking.

Conclusion
You likely aren’t going to be responsible for the everyday acts and omissions committed by you or your employees.  But intentional acts and clear negligence on your part could qualify for piercing the corporate veil and finding you personally liable for the acts of another.

(c) KJD Legal LLC