Should I Start an LLC for My Window Installation Business?

Starting a limited liability company (LLC) for your window installation business can provide several benefits.

Most importantly, an LLC structure offers limited liability to its owners, which can protect their personal assets from lawsuits and creditors.

For a window installation business, lawsuits can arise from things like damaging a customer’s window frame during a job, misrepresenting a window’s quality to increase sales, and defaulting on business loans.

LLCs are also affordable, highly flexible (from a tax point-of-view), and can make your window installation business seem more credible.

Recommended: Use Northwest to form an LLC for $29 (plus state fees).

Do I Need an LLC for a Window Installation Business?

LLCs are a simple and inexpensive way to protect your personal assets and save money on taxes.

You should form an LLC when there's any risk involved in your business and/or when your business could benefit from tax options and increased credibility.

LLC Benefits for a Window Installation Business

By starting an LLC for your window installation business, you can:

Protect your savings, car, and house with limited liability protection
Have more tax benefits and options
Increase your business’s credibility

Limited Liability Protection

LLCs provide limited liability protection. This means your personal assets (e.g., car, house, bank account) are protected in the event your business is sued or if it defaults on a debt.

Window installation businesses will benefit from liability protection because of the risk of product liability, property damage, libel, personal injury, and general business risks.

Example 1: A couple of fitters working for your window installation business accidentally damage a customer’s frame during a job. This prompted the customer to file a lawsuit for negligence against your business. If the court awards the plaintiff compensation for any damage caused, your personal assets will remain protected.

Example 2: In order to kickstart your window installation business, you decided to take out a large loan. When your business isn’t very profitable and is unable to repay the loan adequately, its creditors sue your business in order to get reimbursed. In this example, any business liability to pay damages will not extend to your personal assets.

Example 3: A customer filed a lawsuit for fraud against your business after it made false promises regarding a window’s quality. In the ensuing lawsuit, limited liability will prevent the court from pursuing your personal assets in order to compensate the claiming party.

An LLC will also protect your personal assets in the event of commercial bankruptcy or loan default.

To maintain your LLC's limited liability protection, you must maintain your LLC's corporate veil.

LLC Tax Benefits and Options for a Window Installation Business

LLCs, by default, are taxed as a pass-through entity, just like a sole proprietorship or partnership. This means that the business's net income passes through to the owner's individual tax return.

The business’s net income is then subject to income taxes (based on the owner's tax bracket) and self-employment taxes.

Sole proprietorships and partnerships are taxed in a similar way to LLCs, but they do not offer limited liability protection or other tax options.

S Corp Option for LLCs

An S corporation (S corp) is an IRS tax status that an LLC can elect. S corp status allows business owners to be treated as employees of the business (for tax purposes).

S corp tax status can reduce self-employment taxes and will allow business owners to contribute pre-tax dollars to 401k or health insurance premiums.

The S corp status requires that the business pay the employee-owner(s) a reasonable salary for the work they perform.

In addition, the business might need to spend more on accounting, bookkeeping, and payroll services. To offset these costs, you'd need to be saving about $2,000 a year on taxes.

We estimate that if a window installation business owner can pay themselves a reasonable salary and at least $10,000 in distributions each year, they could benefit from S corp status.

You can start an S corp when you form your LLC. Our How to Start an S Corp guide will lead you through the process.

Credibility and Consumer Trust

Window installation businesses rely on consumer trust. Credibility plays a key role in creating and maintaining any business.

Businesses gain consumer trust simply by forming an LLC.

A growing business can also benefit from the credibility of an LLC when applying for small business loans, grants, and credit.

Northwest will start an LLC for you for just $29 (plus state fees).

Get Started

How to Form an LLC

Forming an LLC is easy. There are two options for forming your LLC:

You can hire a professional LLC formation service to set up your LLC for a small fee
Or, you can choose your state from the list below to start an LLC yourself

Select Your State

For most new business owners, the best state to form an LLC in is the state where you live and where you plan to conduct your business.

Do LLCs Need Insurance?

All businesses need insurance to protect their business assets — even LLCs. This is because the limited liability protection from an LLC protects your personal assets, not your business assets.

As a window installation business owner, insurance can protect your business’s assets against foreseeable financial harm. This is commonly debt that arises as a result of employee injuries or damage to a client’s property during installation.

Note: In the vast majority of states, getting business insurance is a legal requirement for all LLCs that hire employees.

Common Situations Business Insurance May Cover for a Window Installation Business

Example 1: A window isn’t installed properly, causing $45,000 in damages to the client’s home. General liability insurance would cover your legal fees and any damages if a court finds your business at fault.

Example 2: While visiting your warehouse, a client trips on an electrical cord and injures himself. He decides to sue for $60,000, claiming he had extensive medical bills and could not work for several months. General liability insurance would cover your legal fees and any damages awarded by the court.

Example 3: In a social media post, your marketing director suggests that local competitors have a reputation for installing windows improperly. Two rivals sue your company, claiming lost business because of that post. General liability insurance would cover your legal fees and any resulting payouts.

Other Types of Coverage Window Installation Businesses Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all window installation businesses should obtain.

Commercial Auto Insurance

Because you travel to and from job sites in a company vehicle, the state may require you to carry a commercial auto insurance policy. This coverage protects the vehicle, driver, and others on the road in the event of an accident.

While each state requires a certain level of insurance for vehicles on public roads, the minimum requirement only offers basic protection. As such, consider purchasing limits greater than those required by state law.

You can purchase commercial auto insurance as a standalone policy or as part of a business owners’ policy (BOP).

Commercial Umbrella Insurance

Because of the services you offer, your business faces a sizable risk of lawsuits from property damage and bodily injury. While your general liability policy covers most claims, some lawsuits may be so expensive that they threaten to exhaust the limits of your primary coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.

Workers’ Compensation Insurance

Most states require businesses to carry workers’ compensation insurance for their part-time and full-time employees. This coverage protects your employees if they become injured at work or fall ill after a work-related accident. It not only covers an employee’s medical bills and lost wages if they need time to recover but also any disability benefits stemming from a work-related accident.

While your state may allow exemptions for business owners, consider including yourself in your workers’ compensation policy if you engage in the daily operation of the business.

You can typically purchase workers’ compensation insurance as a standalone policy.

Should I Start an LLC FAQ

Choosing the right business structure depends on your business’s unique circumstances and needs. However, unless your business is very low risk (like a hobby), an LLC is likely the better option.

Visit our LLC vs. Sole Proprietorship guide to learn more.

At a minimum, you’ll need general liability insurance, workers’ compensation insurance, commercial auto insurance, and commercial property insurance.

Read our Window Installation and Repair Business Insurance article for more info.

If you own a window installation business, you can expect to need between $5000 and $10,000 in order to get started.

This will be used to acquire appropriate licensing, tools, business insurance, and transportation.

A few other costs to bear in mind include certification courses — in order to become qualified to fit and repair windows — as well as basic office equipment (such as a computer, printer, scanner, and filing cabinet).

Visit our How to Start a Window Installation Business guide to learn more about the costs of starting and maintaining this business.

The ongoing expenses of running a window installation business include maintenance of tools and equipment, installation materials, marketing, and insurance.

Learn more about running a window installation business.

Window installation businesses make money from fees for their installation or replacement services, and if they are window retailers as well, from the margin on the retail price of the windows they sell.

Learn more about starting a window installation business.

The US window installation industry is estimated at $5 billion and is projected to grow in the next five years. With low barriers to entry compared to other construction industries, the window installation market is very competitive.

Sustainable profit margins for window installation businesses range between 25% to 40%.

Learn more about starting a window installation business.