Creating a new account on your cPanel server might yield the following error message:
508 Insufficient Resources
Although the site might not be using any resources as of yet.
Checking the /usr/local/apache/logs/error_log, you may see these entries related to the issue:
[NOTICE] [APVH_username_Suphp:] Increase effective max connections to 1.
[INFO] [APVH_username_Suphp:] PID: 636931, add child process pid: 641596, procinfo: 0xfdb0a0
[NOTICE] [uds://tmp/lshttpd/APVH_username_Suphp.sock] Fail all outstanding requests!
A temporary solution would be to exclude the user from the CageFS skeleton using the WHM control panel, but the actual solution to this issue with LiteSpeed is to run the following as root via SSH:
Hope this helps!