By nature, contracting is a risk. Risk might be defined as the potential exposure to loss or danger. Life itself is a risk. One of my favorite jokes is about the guy who went to the doctor and was diagnosed as terminally ill. He told the doctor, “That can’t be, I don’t drink, I never go out, I’m a health nut, and I sleep 10 hours a night.” The doctor replies, “I’m sorry you are definitely terminal.” He replies, “But I meditate two hours a day, I’m a vegetarian, I’m a virgin, and I take no risks of any kind.” The doctor replies, “Then why should you care?” Like anything else, risk management might be most effective when undertaken in moderation but there are things you can do to reduce your liability.
Through my years of being a consultant, I’ve found that risks fall into two categories, general business risk and job risk. General risks are things such as death, disability, natural disasters, theft, auto accidents, computer backup failure, etc. A good accountant, financial planner or estate lawyer can probably provide you with a checklist that can prove very helpful in these areas. For this article I’m going to focus on job risks and how to avoid them.