Phoenix Business Journal:  “A Maricopa County jury has awarded $5.9 million to a Valley man who suffered brain and severe back injuries after falling 10-feet off of a ladder while helping build a church roof in Rocky Point, Mexico.”   The plaintiff was Ronald Day who sued the Central Christian Church and Amor Ministries.  See “Valley church wants new trial after $5.9M verdict in volunteer fall case.”

This case is a perfect example of why people need to operate a business or own investment real estate in an entity that protects the owners of the entity from things that go wrong. If you are doing fix and flips without the protection of a limited liability company, you will be the defendant in the lawsuit if a worker gets hurt on the job and all of your life savings will be at risk.

This case is also a perfect example of why you should not rely solely on insurance, including an umbrella policy, as your only line of defense if something goes wrong. A lot of people acquire a $5 million dollar umbrella policy, but if the judgment is $5.9 million, you have a $900,000 problem. Insurance should be your first line of defense, but the LLC is the second line of defense.

Things happen so you need to form your LLC before the worker falls from the ladder or causes the car accident.