Should I Start an LLC for My Pest Control Service?

Starting a limited liability company (LLC) for your pest control service 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 pest control service, lawsuits can arise from things like unintentionally damaging a customer’s house with your pest control methods or exaggerating the effectiveness of your methods.

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

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

Do I Need an LLC for a Pest Control Service?

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

You should start 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 Pest Control Service

By starting an LLC for your pest control service, 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.

Pest control services will benefit from liability protection because of the risk of being sued for things like personal injuries, property damage, and trademark infringement.

Example 1: You are hired to exterminate some rodents at an old home. While doing so, a child trips over a can of pesticide left carelessly in the driveway and sustains serious chemical burns. She receives immediate treatment but is left with serious scarring and a need for plastic surgery. If they file a lawsuit against your LLC, limited liability will ensure that your personal assets remain protected regardless of how the claim progresses.

Example 2: You take out a loan to finance the purchase of equipment for your pest control business. Business is extremely slow, leaving you unable to repay, and the bank sues your business for defaulting on the loan. Since the loans were guaranteed by your business, you will not be held personally liable. Only your business assets would be used to offset the loan.

Example 3: You supply some pesticides to a greenhouse to eliminate a bug infestation. Two weeks later, a whole batch of plants dies, and the investigation reveals that your pesticides were behind this. The greenhouse sues you because of the loss of a premium sum. In the ensuing lawsuit, you would be protected from being held personally liable to pay any damages.

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 Pest Control Service

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 pest control service 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

Pest control services 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.

If any customers have an allergic reaction or get injured in the course of extermination or while using your pesticide solutions, insurance can help cover the medical costs and get you back to work sooner.

Common Situations Business Insurance May Cover for a Pest Control Service

Example 1: While treating the home of a customer, your employee accidentally spills pesticide all over an expensive entertainment system. With a general liability insurance policy, you are able to cover the costs of replacing the customer’s equipment without needing to pay for the replacement costs yourself.

Example 2: Your employee fails to provide information about the dangers of pesticides to a customer, and her dog gets sick from them. The dog requires expensive veterinarian care, which the customer demands that you pay for. A general liability insurance policy will cover the costs of treating the dog, as well as any potential lawsuits that arise.

Example 3: While searching for the source of a pest problem in a customer’s home, you accidentally knock over a china cabinet filled with heirloom china. Most of the dishware shatters, and the cabinet breaks. Your general liability insurance policy will cover the costs of these damages up to the limits of your policy.

Other Types of Coverage Pest Control Services 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 pest control companies should obtain:

Commercial Property Insurance

Commercial property insurance is there to provide protection for your commercial property, such as your pest control equipment and supplies. If you were to lose your property in a fire, storm, or another covered event, your policy would pay for you to replace that property up to the limits of your policy. Commercial property insurance can provide much-needed assistance when you want to get your business up and running again after a disaster.

Commercial Auto Insurance

Your pest control vehicle is used primarily for business, which means it should be covered by a commercial auto insurance policy. The policy requirements vary by state, but all commercial auto policies are designed to protect your vehicle and those who are driving it, whether it be you or an employee. If the vehicle is involved in an accident, the policy will pay for medical care for the injured as well as property damage to the vehicle or damage to other property caused by your truck.

Workers’ Compensation Insurance

If you have employees, you need workers’ compensation insurance. The workers’ compensation insurance you carry will pay for the medical care of workers who are injured while performing the duties required by their jobs. The insurance will also pay for lost wages when an employee is unable to work for a period of time due to a work-related injury. Whether the employee suffers pesticide poisoning, slips and falls while treating a home, or suffers any other work-related injury, your policy has you covered.

Commercial Umbrella Insurance

Sometimes the expense of paying for property damage, medical care, or a lost lawsuit exceeds the policy limits of your general liability insurance policy. When this happens, you are left holding the bill unless you have commercial umbrella insurance. Umbrella policies pick up where your general liability insurance policy leaves off.

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, commercial auto insurance, and commercial property insurance.

Read our Pest Control Company Insurance article for more info.

There are manifold costs involved in starting a pest control business. You would have to factor in the cost of rent, equipment, labor, insurance, and vehicle expenses. You would also need to license and register the business. Going forward, marketing costs and other utility costs will also be necessary.

Visit our How to Start a Pest Control Service guide to learn more about the costs of starting and maintaining this business.

Rent, utilities, payroll, marketing, equipment purchases and maintenance, and insurance are the primary ongoing expenses

Learn more about running a pest control service.

A pest control service charges clients to remove pests.

Learn more about starting a pest control service.

A pest control business helps control or eliminate these animals by using chemicals, traps, and other means. Pest control services can service individual homes, schools, businesses, and government facilities.

The number of clients, overhead costs, and specific market niches determine profits.

Learn more about starting a pest control service.