Being a self-employed worker comes with a degree of freedom and certain advantages. However, it also means assuming several extra responsibilities, because everything rests on your shoulders. That’s why it’s important to consider the different types of coverage and insurance for a self-employed person. For example, what will happen if you get sick and cannot work? What will you do if your car breaks down and you can’t get to your customers? How will you be able to pay damages to a visitor who slips on your stairs and is injured? You’ll be able to count on your insurance … provided, of course, that your insurance coverage is adequate!
Do you find these different types of coverage confusing? In this article, AMR provides a list of the different types of coverage that a self-employed worker should consider.
The main types of insurance coverage you should have if you are self-employed
Business property insurance
To cover property used in the performance of your professional activities up to a fixed amount, basic coverage is usually included in your homeowner’s insurance policy.
If the amount for damages initially included in your homeowner’s insurance policy is sufficient to cover your professional property and if the latter meets the eligibility criteria set by your insurer, you are not required to take out additional coverage. However, it is essential that you let your insurer know about your home-based professional activities! You’ll avoid many problems if you have to make a claim.
In addition, if the value of your equipment exceeds the coverage provided or doesn’t meet your insurer’s eligibility criteria, you can purchase a rider, which is a document attached to your insurance policy whose purpose is to add (or remove) coverage.
In order to ensure that you have sufficient coverage to replace all your business property in the event of disaster or theft, we recommend that you draw up an exhaustive list of your property and calculate its value.
Then contact an independent insurance broker who represents several insurance companies. Totally impartial, they will find the best coverage for you based on your needs.
Civil liability
Generally included in your homeowner’s insurance policy, this coverage will cover damages if one of your customers is injured or if you cause damage to their equipment in the course of your work, whether the incident occurs on your premises or elsewhere.
However, to be sure that this coverage is sufficient, we advise that you check with your insurance agent or broker. They will be able to assess your exposure to risk and modify your insurance contract if needed in order to add extended civil liability coverage for your business activities.
Professional liability
This insurance protects you in the event that a claim is brought against you for errors or omissions committed in the course of your work. This coverage is mandatory for members of certain professional orders (such as chartered professional accountants), but other professionals can also take it out. Ask your insurance representative for more information.
Automobile insurance
If you use your vehicle in the course of your professional activities, mention this to your insurer. They will be able to provide adequate coverage corresponding to your situation.
Home insurance
If you work from home, it is also important to let your insurer know and to specify the nature of the risks you encounter there (storage, use of tools, computer equipment, etc.). If necessary, they will then be able to make the necessary adjustments to your contract.
Business insurance for the self-employed
If the above-mentioned types of coverage aren’t sufficient to adequately cover your professional activities, your agent or broker may recommend that you take out business insurance specifically designed for self-employed workers.
This can include, for example, civil liability coverage to protect you from damages you cause to others as well as for products sold; protection in case of loss of income; coverage for accounts receivable, cash registers and important documents; compensation in the event of equipment failure, etc.
In conclusion, being a seasoned self-employed worker doesn’t just mean a real work station, amazing business cards, a powerful website, excellent customer service and sound accounting management. It’s also important to think about insurance, an aspect that is sometimes overlooked.
Even though you are now aware of the key types of insurance coverage a self-employed worker should have, they may not necessarily be sufficient to cover your professional activities. In fact, needs vary greatly from one business or person to another. That’s why the help of an independent insurance broker is so valuable! These totally impartial insurance experts will be able to advise you and put together a customized coverage solution for you that aligns perfectly with your reality, at the best price possible. Contact us today to talk to one of our independent brokers!