I'm not an expert on laws governing LLCs in different states, and I'm sure that there are loopholes / exceptions for certain circumstances. But being setup as an LLC vs. a sole proprietorship offers you significantly more protection. If you're targeted in a lawsuit operating as a sole proprietor, I believe all your personal assets are at risk. Operating under a LLC makes it significantly harder to come after your personal assets, especially if you're good about keeping business & personal assets in separate accounts.
Another thing I've heard recommended / try to do is to always sign as a member of a LLC (include your company position next to your signature) so it's clear you're signing on behalf of the LLC and not personally.
"But being setup as an LLC vs. a sole proprietorship offers you significantly more protection."
IANAL: I feel this depends on whether or not the LLC has two or more members. When an LLC has one member who is active, it's not much better than a sole proprietorship. Having great legal protection is a myth about single member LLCs that needs to be broken. It's relatively easy to pierce an LLC's corporate veil. Then again someone may prove me wrong. You need to talk to a lawyer.
Another thing I've heard recommended / try to do is to always sign as a member of a LLC (include your company position next to your signature) so it's clear you're signing on behalf of the LLC and not personally.