Urgent LLC Questions

Hello;

Wondering if someone can shed some light on the personal liability protection when forming an LLC. I am comparing forming an LLC VS forming a Sole Proprietorship.

I believe that forming an LLC protects a person from the business debt of the LLC. A persons home or personal assets could not be touched to pay a debt of the business. My biggest worry would be liability protection - ie if you install say a hot water tank and it floods a persons house is there protection from someone going after your personal assets to collect damages?

If a person forms a Sole Proprietorship, they would of course take out a protecting liability insurance policy. This insurance would cover any type of work failures.

Is it necessary to take out a liability insurance policy if a person forms an LLC? If so than it seems that it would be much easier for a person to just form a Sole Proprietorship if their business is only providing services and would not be running a business that say makes expensive widgets and must keep a large debt owed to suppliers.

Wondering if anyone can shed some light on the Liability Issues of A LLC.

Regards

Sonny