High Risk Business

Starting a business is inherently risky, and when you add in additional high risk components, it may be a recipe for disaster. You can mitigate some of these hazards by buying the necessary insurance, but if you plan on starting a construction company, hazardous waste disposal company or some other form of high risk business, there's simply no avoiding the inherently dangerous nature of the business. Not all risk is so obvious, however; here are some very common forms of risk that companies often take on:

• Caring for children or animals
• Providing access to alcohol
• Making driving part of the job
• Building or repairing structures or vehicles
• Including physically dangerous activities as part of the job (e.g., lifting heavy objects)
• Repairing or handling rare or high value items (e.g., antiques)

If you do plan on starting a business that involves any of these, you need good insurance and should structure your business in a way that protects you from personal liability. Consider forming a corporation, limited liability company or limited liability partnership.

In general, avoid being the sole owner of a high risk business or structuring your business as a general partnership, since these forms of business structure leave their owners personally liable for the debt and judgments incurred by the business.