Self Employed Insurance

Written by Meg Stefanac
Written by Meg Stefanac

Financial blogger and business owner, Meg Stefanac, has more than 15 years experience working in the financial services industry and enjoys helping individuals make solid financial decisions. Meg has extensive experience writing about insurance and finances and is a key contributor to

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For the past thirty years, the number of self-employed Americans has risen steadily. A difficult job market, the ease of finding jobs online and the flexibility and freedom of self employment are all factors that have driven these numbers up, particularly in recent years. If you are one of the millions of Americans who have discovered the joys of self-employment, you may want to consider the potential risks you face with this type of work and look into purchasing self-employment insurance.

You may have questions about the insurance coverage that is available to you, and might want guidance or assistance when looking for an affordable policy. This article can help you understand business insurance options for your company.

Statistics about Self-Employment in America

  • In 2009, approximately 15.3 million Americans were self-employed
  • This equates to more than 1 in 9 U.S. workers
  • The most common industries for self-employment are agriculture, construction and service industries
  • Among the ranks of the self-employed, 62% are men and 38% are women

What Are the Concerns of the Self-Employed?

There are advantages to taking your employment into your own hands, but you sacrifice many of the benefits offered by corporate employers. You will therefore need to secure the following on your own:

  • Health Insurance: Health insurance is vital for maintaining your personal health and well-being. Unless you receive coverage through a spouse or parent, you will need to purchase a policy on your own.
  • Disability Insurance: Many self-employed people overlook this very important coverage until it is too late. Particularly, those with labor-intensive jobs may be left unable to perform their job duties following a debilitating accident, illness or injury. Self-employed disability insurance is designed to protect you by providing some income if you are unable to work.
  • Liability Insurance: You can protect your personal assets by incorporating as a limited liability corporation, or LLC. While there are tax implications for doing so, it can prevent you from falling into personal bankruptcy if your business is sued for liability. However, a lawsuit may interfere with your self-employment status. A commercial insurance plan can provide you with better liability coverage and allow you to stay in business.
  • Life Insurance: If you have others who rely on your income and you suddenly pass away, you may not have sufficient means to support your loved ones. Many companies offer their employees group life insurance. As a self-employed individual, you will need to invest in a suitable life insurance plan on your own.
  • Retirement Plan: Some companies offer their full-time employees a means of saving for retirement, whether through a 401-k, a 403-b or a pension or profit sharing plan. You will need to set this up on your own. A financial advisor can help you create a self-employed retirement plan through an IRA or other investment vehicle.

What is Self-Employed Insurance?

Self-employed insurance is a business insurance plan specifically designed to meet the coverage needs of your business. The main reason for having this insurance is to protect you from liability claims that may be brought against you.

Who Are America’s Self-Employed?

  • Percentage between 16 and 24 years old: 3.5%
  • Percentage between 25 and 34 years old: 13.9%
  • Percentage between 35 and 44 years old: 21.9%
  • Percentage between 45 and 54 years old: 28.0%
  • Percentage 55 and older: 32.7%

Why Do I Need Self-Employed Insurance?

Those who are self-employed do not always feel there is a good reason to spend money on insurance coverage. Depending on your profession, you may not face many risks from day to day, but it's important to know that without business insurance, your personal and business finances could be at risk in a liability claim.

Liability claims can range from being sued for an injury at your place of business to causing property damage while working in another person’s home. For those that provide professional services, there is the risk of a dissatisfied customer suing you for sub-standard work or breach of contract. A business insurance policy can provide you with coverage that can protect you from financial losses relating to liability lawsuits.

This insurance can protect you by providing coverage if you suffer property loss or damage to your business materials or equipment. If you do lawn maintenance work, for example, and your equipment is damaged or stolen, you may be able to receive compensation for your losses.

Likewise, if you work exclusively on a computer and your machine and software are damaged in a fire, you may be able to collect restitution. In some cases, your homeowners insurance may cover these losses, but not all.

Is Self-Employed Insurance Expensive?

Insurance for the self-employed does not have to be unmanageably expensive.. You can build a policy that will provide coverage only for the risks that are inherent to your business industry. The lower your risk of liability claims, the less your policy will cost you.

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