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You're likely going to need special licensing if you're handling money as an intermediary. You should contact your Secretary of State (http://www.cyberdriveillinois.com/contact/contact.html) and ask what license you need to acquire from the state to be legally operating.
You can establish that you're legitimate by being licensed and registered with the Secretary of State.
Yes, you do need liability insurance. All companies face problems and you don't want a mistake to cost you your business.