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Greg_M, post: 269881, member: 38207 wrote:
I’ve found insurance is essential, often expensive but not always reliable when the proverbial hits the fan.
My solution was to get an accountant to set up a discretionary trust controlled by a company structure. Supposedly the closest thing to bullet proof for protecting assets in Oz.
I don’t think you can eliminate all risk, there’s a direct correlation between risk and profit it’s really what you’re comfortable with.
Insurance can be expenisve – if the risk is high. The better you understand your own risk you can

  1. eliminate it
  2. transfer it e.g. drop shipping eliminates the risk of damage to stored stock or
  3. Insure the risk properly – communicating the risk clearly helps get a cheaper insurance price

You probably need to do some or all of 1-3 above and each option will cost you something – time, money or both. Not all risks are insureable – but insurance should almost certainly be part of your risk management strategy. Some insurances like CTP and Worker’s Compensation (both of which are more a govt tax than insurance) are compulsory too. Others like Public Liability should be.

As for company structure I would be careful on relying on this solely. I believe Corporate legisaltion and legal precendent has pivoted toward personal responsibility for directors – so you cant just cut and run. Also any significant contract or loan will require a personal indemnity from the director anyway.

So have a think about what your real risks are, what risks you can avoid, insure those you can’t avoid. Those you can’t avoid or insure either live with it if the outcome is not disastrous or else don’t proceed.
Hope that helps :)