Managing Contingent Risk

The Gulf spill brings up a real time example of contingent risk. This type of risk is one that many business owners don't see coming. If your business income is largely dependent on others that are out of your direct control, then you have contingent risk. For example, the restaurant industry that depend on the Gulf fisherman who are now docked due to the oil, have a major contingent risk. Without the fishing, restaurants have no product to sell, or may have to go through major unexpected expense to obtain seafood from other areas of the world. Trying to think of scenarios to manage this is very challenging. My attempt here is to start the thought process so business owners are aware of this type of risk. Until next time be careful out there and know your risks. K

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