Every small business owner or entrepreneur needs to be financially prepared to deal with unexpected events or accidents should they happen. It’s why these savvy business people purchase liability insurance.

The same applies to the self-employed, who do not work for a specific employer earning a wage or salary. Instead, they agree to a contract for services with an employer, work independently, and are free to determine when and for whom they work, and may choose to work for multiple employers at the same time.

Someone who is self-employed is different from a freelancer, which is like an independent contractor. However, freelancers tend to work on a by-project basis for multiple employers at one time and charge a flat fee for their services (for example, a freelance writer or graphic designer). On the other hand, independent contractors usually have long-term contracts and earn wages or salaries. In addition, they may register their businesses as sole proprietors or corporations for taxation purposes.

Self-Employed Woman

Statistics Canada considers self-employment as being people who own an incorporated or unincorporated business, farm or professional practice, or individuals without a business. StatsCan data shows there are over 2.6 million self-employed Canadians as of late 2021. That’s the fewest number of self-employed Canadians in over a decade.

According to the Labour Market Information Council, solo self-employed Canadians (individuals who work independently without employees) account for 73% of all self-employed people. These self-employed professionals also need to prepare for the unexpected by having a backup plan to help them recover financially from an accident, mishap, or lawsuit.

What Kind of Self-Employed Insurance Should You Have?

Of course, there are a lot of similarities between self-employed individuals and other types of workers. But as it pertains to the kind of business insurance the self-employed need, the devil is in the details, or so the saying goes. That’s because every self-employed person’s service is unique, and accordingly, what insurance coverages they require may vary.

Some coverages that generally apply to most self-employed insurance policies, though. These may include the following:

  • Commercial general liability (CGL) insurance. CGL, or general liability, is perhaps the most common coverage self-employed and other small business owners purchase. It covers the cost of third-party bodily injury or property damage resulting from an accident you may be responsible for if you’re sued. Moreover, many contacts or companies may not hire you unless you provide them with proof (usually called a certificate of insurance) that you have a valid policy, including CGL in your back pocket.
  • Commercial property insurance. Whether you work out of your home or another location you own, commercial property coverage protects all the tools, equipment, and electronics you need to do your job. It also covers the cost of your inventory and furniture. So, if your stuff is damaged because of a fire, burst water pipe, vandalism, or severe weather like a tornado or windstorm, commercial property insurance will pay to repair or replace it. If you are running a business from home, be advised your residential home or condo insurance may not cover those losses since home policies aren’t designed to protect business-related activities.
  • Professional liability insurance. Whether you call it professional liability or errors and omissions (E&O) insurance, it’s a must-have if your work involves advising your clients, offering services, or developing products for them. If you make a mistake, are accused of negligence, miss a deadline, or fail to deliver what you promised, and your client suffers a financial loss, don’t be surprised if they sue you to recoup those losses. Professional liability coverage exists for that reason. It provides financial support by covering your legal expenses if sued and any damages awarded to the client who took you to court.
  • Commercial auto insurance. If your self-employed venture requires the use of a vehicle to transport people or goods, then you need to think about getting a commercial auto insurance policy. A personal car insurance policy typically doesn’t account for accidents or incidents when driving for business reasons.

How Can You Find Affordable Self-Employed Insurance?

There are a few ways to go about finding the type of business insurance policy that suits your needs and budget, including:

  • Ask for recommendations. If you don’t ask, you don’t know. Talk to your friends, other self-employed folks, or small business owners for their suggestions on what insurance companies to consider. Then, look those insurers up online and check the reviews they get from their current and former customers. If an insurer’s claims service record appears to be less-than-stellar, you might want to look elsewhere.
  • Shop around and compare coverages. Generally, it’s wise to get quotes at least annually to compare what you’re presently paying for your business insurance policy, including any policy’s deductibles, restrictions, and coverage limits. Having a licensed broker in your corner can simplify and streamline your search. A broker can serve as a trusted advisor who will answer questions about insurance policies (the terminologies can get confusing) and craft a customized policy for you to ensure you are neither underinsured nor overinsured.
  • Talk to local industry groups. If you are part of an industry group, local Business Improvement Association, or Chamber of Commerce, inquire if there is a business insurance partner that provides a discount on premiums for their local business members.
  • Weigh the cost of risk. Everyone wants to find the cheapest insurance policy they can but going for the lowest of the low among premiums may not always be the best option. For instance, if you’re underinsured and file a claim for something you don’t have coverage for, it’ll potentially cost you significantly more than an annual premium for a comprehensive insurance package.

As a business insurance broker, Zensurance specializes in helping self-employed professionals, independent contractors, entrepreneurs, and small business owners across Canada get the coverage they need, often at up to 35% less than our competitors do. How? We have the relationships that count with more than 50 Canadian insurance carriers in our partner network. That gives you more options to get insured adequately at the lowest premium available on the market.

Try it for yourself. Fill out our online application and answer a few questions about what you do to get a free quote. Then, our licensed broker team will get to work finding you the customized policy you need at the best price.


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