Define 'sole proprietorship' within personal lines insurance.

A sole proprietorship is defined as a business structure in which one individual owns and operates the business. This structure is significant in personal lines insurance because it directly affects how personal liability coverage is managed for the owner.

In this type of business, there is no legal distinction between the owner and the business entity. As a result, the owner is personally liable for all debts and obligations of the business. This means that personal assets could be at risk if the business were to face lawsuits or debts, which is a critical consideration for personal lines insurance.

Personal lines insurance offers coverage that can protect the individual owner from personal liability that arises from the business activities. This coverage is especially important for sole proprietors, as they do not have the protections that corporate structures, like limited liability companies or corporations, provide. The sole proprietorship's implications on personal liability make it essential for business owners to appropriately secure insurance that addresses these risks.