NEW BUSINESS OWNERS

As of July 2009, 14.5 million Americans were unemployed. Also at the end of July 2009, only 2.4 million jobs were open.
There are many more job-seekers chasing too few number of openings.
As a result, many Americans are turning to being self-employed. Given the fairly easily overcome, barriers to entry, many people find starting their own business to be fairly easy and fairly inexpensive.
Recently, I met a woman who explained to me that she started her Internet business because it was fairly easy, low-cost to join and she was promoting products that she had been taking for awhile and was improving her quality of life.
She had begun this business offering the products retail, then recruited other distributors allowing her to earn income from her direct sales and sales from her recruits.
When I asked her what protection did the company offer her in the event a person who ingested on these supplements, claimed illness. Her response shocked me. She told me that the manufacturer had a stellar reputation and she felt comfortable that the company would stand behind its product. However, after I read the distributors agreement, I asked her why the company was NOT extending indemnity to her if a claim should arise.
Or, the mother/daughter team making cookies for commercial sale. They intentionally avoided purchasing product liability insurance. Instead they are relying on the protection of the corporate veil, taking the position that should a claim arise, they will simply allow the company to file bankruptcy.
We have vilified the financial services sector for taking huge risks in the reckless pursuits of profits. Entrepreneurs should take care to identify and assess the exposures to risk their business poses and plan accordingly.