Let’s say, you do have someone injured at an investment property and you have only $500,000 of liability insurance. If you are sued and lose, you can lose your building. Given a choice between spending money on the costs of an LLC and other annual costs relating to owning and accounting for an LLC, a small investor who has just one or two properties might find it less expensive or onerous to pay for increased insurance coverages, which to them might be worth more than the protection afforded by the LLC.
