Making products but insurance is a killer, options?

[Aw113sgte]

The company:
Single owner LLC
No debts or loans, few assets, low cash in the bank.
Various automotive performance parts
Initial product and liability insurance was $5700, now when I tried to add another product, they are requiring $2500 for each, reguardless of how many I sell. This makes it very difficult to make my money back. If I have 20 differint products, insurance would be $50,000 per year!

Unfortunately a $2500 price increase causes this business model to not be viable. I wish i had known this earlier. I find it hard to believe that small product based businesses can make a profit considering this insurance structure. Am I missing something? I see many of these types of companies online, do they just not have any product insurance? This structure forces fewer products to be made, but in higher quantities.
At this point I have a couple options, drastically change my business plan, or find a different insurance method.

If the company gets sued, and I don't have any insurance for the company, I'm guessing the company would have to use it's own funds to pay for lawyer etc, and if it couldn't it would go bankrupt. Now that really isn't a problem but I need to make sure my personal funds are protected. Now that is what the LLC is supposed to do, but I hear it's not foolproof. Is there any way to have insurance kick in, in the event someone comes after my personal funds?

[Spider]

You need an experienced insurance agent, I would think. Ask your bank manager or your attorney (if you have one) for a reference.

And, welcome to the forum.

[Business Attorney]

First, I agree with Frederick. You need a good insurance agent or insurance broker who will shop around for the best deal. The approach that your current insurer is taking makes no sense.

You are right that an LLC is not foolproof. I have an article on my LLC website describing some of the ways that a member of an LLC can still be liable for LLC business activities (http://www.limitedliabilitycompanycenter.com/how_limited_is_limited_liability.html). For example, if you are personally negligent in the design or manufacture of the product, then you are potentially personally liable for the damages. The concept of piercing the corporate veil (http://www.illinoisbusinessattorney.com/articles/piercing_veil.html) also is always a factor.

Even if you are ultimately not liable under either of those (or several other) legal theories, you still may incur substantial legal fees defending the lawsuit that is brought against you personally.

For all those reasons, you really need to make sure that your insurance coverage is adequate.