It vastly reduces the expected value to them, and thus the incentive, and the expected cost (legal and liability) to you, but no, it's not an absolute shield.
> . You can try to claim "it was the business's fault" but if you're a single member LLC (with no employees) this is very difficult
Well, yes, but the problem with that isn't “single-member LLC” (for which the standard is pretty much the same as any other limited liability entity) but the “you’re” part: a key requirement of maintaining limited liability is that the entity is operated as a distinct thing from the principals. If you view yourself as not distinct from the LLC—that the LLC is something you are and not something you have or operate—that's a pretty good sign that you are thinking about it wrong from the start.
Very subtle catch. I meant “you have” but still, I wish I could give you more upvotes.
I'm not a lawyer, but this happened to my dad a couple of times in his life. The first time, he lost control of his business and had to declare bankruptcy. The second time, it was dismissed.
Edit: For those curious. Having "policies" written down and following those policies to the letter will save you if you are ever personally sued for something your business does.