Self-employed: What kind of insurance do you need?
Own a small business? Congratulations on being self-employed! But do you know the right types of insurance you need to help give you peace of mind?
Of the 34.4 million Canadians, approximately 2.7 million are self-employed. Being your own boss has its many perks and responsibilities. From dictating your schedule to picking which clients you work with, you have freedom and flexibility. The type and/or frequency of your work can directly affect your income and the opportunity to maximize profits.
What insurance do I need?
As a small business owner, it is important to make a risk assessment of your operation. A great way to minimize your risk is through various insurance policies or certificates that suit the needs of your business. Expenses, deductibles and premiums will vary for each of the following.
You might be a single parent or the breadwinner of your family. Protect your family in the event tragedy strikes and something happens to you. Don't let the debts of your business fall upon your family.
Should you be injured or fall ill for a long and unexpected period, you will be unable to work. Disability insurance will provide you income for a specified amount of time, negotiated in the terms of the contract.
Critical illness insurance
If you are diagnosed with a critical illness, this insurance provides you with a lump-sum payment.
Property and contents insurance
Protect all business assets — whether you own the property or are leasing it — so they are covered in the event of disaster or destruction.
If you drive a vehicle for business, ensure it is covered under business vehicle insurance.
Reducing your liability
No one is perfect, and mistakes happen. Managing your risks by ensuring employee (if applicable) and customer safety is paramount. Warning signs and waivers can be used to thwart threats of lawsuits, but the following can help reduce your liability:
This protects against injury to staff and clients that occurs on the business premises.
If your business sells products, this provides protection should your products be defective and cause serious harm to those using them.
Professional liability insurance
Similar to medical malpractice insurance, this provides protection if you are sued by a client for negligence when performing a professional service.
If you employ multiple employees, it might be wise to offer health insurance as part of a benefit package. However, if you're flying solo, check out the government-sponsored Employment Insurance scheme.
Still unsure which coverage is appropriate for your small business needs? Shop around for an insurance agent or broker who is familiar with your industry or trade. Spend some time developing a risk management plan and adopting appropriate policies that will provide you peace of mind.