Liability insurance self-employed risk protection

Finance, Taxes, Banking, Insurance and Retirement
1
Hi all

I was wondering which of the following options would give the best protection on personal savings, assets in case of contractual litigation with a client:

1) being self-employed + stipulating a professional liability insurance

vs

2) setting up a GmbH and therefore being an employee of my own GmbH.

My activity has very low risk and I do not make use of debt / get loans from banks to start the business.

Thank you

2
You have to check if the first one is possible. AXA did not insure me as a self-employed person with a customer in the US.

I think the second one is safer, but a bit more expensive.

3
I very much doubt option one is viable. It's going to be hard to find a company will to cover you. And even if you do get cover, it will be expensive and most likely come with a lot of constraints.

In the case of option two, which in reality is probably the one option, you should be aware that operating through a company does not absolve you from liability, if you act fraudulently or without due care and are relying on the company solely to protect your assets. A judge might decide to remove that protection on the application of a creditor.