What is my liability as an Independent Rep of a domestic LLC in California wholly owned by a foreign person?

Asked 5 months ago - Glendale, CA

The LLC provides offshore back office services using the cloud and its data servers are located in secure centers outside of the US.
As an Independent Contractor is there any personal liability that could accrue to me in respect of data security as well as the services provided by the LLC? Will the Contract that I have signed with them be my only defence or do I need some form of Insurance Coverage to protect myself from possible litigation due to errors or ommisions committed by the LLC? If yes, what kind of coverage will satisfy this requirement?

Attorney answers (2)

  1. Dana Howard Shultz

    Contributor Level 20


    Lawyers agree


    Answered . It is impossible to provide a detailed answer without more informaiton about the parties and their agreement.

    That said:
    - If one is operating as a sole proprietor, one can obtain additional protection by forming one's own LLC and complying with applicable formalities.
    - Insurance - commercial general liability at the least, perhaps E&O or other, depending on the nature of one's business - is a good idea.

    This information does not constitute legal advice and does not establish an attorney-client relationship.
  2. Peter Collins Freeman

    Contributor Level 10


    Lawyer agrees


    Best Answer
    chosen by asker

    Answered . Mr. Shulz has given some great information for initial considerations for you. You can establish a separate company, i.e. an LLC or corporation, to be the independent representative, if you believe there is a basis for some liability as the rep for this offshore-based company. Often, an independent rep has little liability for the conduct of the business it represents, unless the rep becomes too involved in the agreements between the company and the customers located and obtained by the rep. In part, your liability will be based on the relationship you have or establish with the company and how and when it will indemnify you (if it has the resources to do so), but you may also create liability to others by holding yourself out in a fashion that suggests you are responsible and are more involved than simply an independent rep.
    You should consult with a business attorney in your area to discuss more specific information regarding this relationship.

    The foregoing is not offered as legal advice, but is a general analysis of the situation posed by your question.... more

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