As a self-employed individual, you are your own business. And in the same manner that a traditional organization compensates its members for their work in terms of wages and benefits, you will likewise ensure that you, and any individual in your employ, receive proper remuneration.
Foremost to this is an appropriate insurance policy. Accidents and untoward incidents can happen at any given time to you, your employees, or your place of work, and as the person in charge, it is only prudent that you protect your assets. For the self-employed individual, below are the three primary types of insurance you should get.
Health Insurance
American law mandates that its citizens have access to basic health insurance, and penalizes individuals who do not acquire one. Employees who work for a company will generally have a health insurance subsidized by their employers, but the self-employed, unemployed, or underemployed will have to get their own policy.
For the self-employed worker, a high deductible health plan (HDHP) is an excellent choice for insurance policy because of its affordable but wide-ranged structure. Under the HDHP, individuals will initially have a higher upfront cost of health services before the insurance plan formally takes effect, but will eventually enjoy lower monthly premiums, and easier access to a wide range of medical services. In such case, it is prudent to have an emergency fund in place to mitigate the initial expenses. If you have not yet started an emergency fund for you and your dependents, it is highly recommended that you open one immediately.
Disability Insurance
For the self-employed, no work means no pay, and such a system could prove debilitating in the unfortunate event of an injury, sickness, or similar incapacitating circumstances. Protect yourself and your loved ones from such situation by getting a top-quality disability insurance plan.
This type of insurance comes in two forms: a short-term policy, and a long-term plan. The former covers a brief period of time, for a specific number of reasons, which can include a three-to-six month compensation for an individual involved in a minor accident but is expected to fully recover, a period of maternity leave for a mother who just gave birth, and other similar cases where the insured is unable to return to work only for a short, specific period of time.
On the other hand, long-term disability insurance plans have less-rigid terms, and are designed to protect its holders in worst-case scenarios, where the disability, defined as the general failure to earn a living, can last longer, or even permanently. Common examples would be a grievous injury, whether incurred at work or elsewhere, crippling sickness, or other debilitating personal circumstances. In such case, a long-term insurance plan will ensure that your basic needs, especially medical and rehabilitation expenses, will still be met, and your beneficiaries will not suffer because of your inability to provide for them.
It is important to note that because disabilities vary on a case-by-case basis, insurance companies will have strict policies and requirements as to who qualifies for compensation. In places like California where health care policies are continuously evolving and becoming more nuanced, it is your responsibility to exercise due diligence and thoroughly research your local and state policies. Get in touch with your provider, or have a consultation with legal professionals to learn more about this. L.A. residents in particular can contact our Los Angeles disability insurance lawyers to have a better understanding of Californian insurance policies, as well as to assist with claims should the need arise.
Business Insurance
Lastly, you must likewise secure your actual livelihood against risks inherent to the industry. There are four main types of business insurance necessary for the self-employed.
General Liability Insurance
This form of business insurance covers generally physical incidents that are taken to court. Examples of such would be a customer injured in your establishment, or a client’s property damaged because of your direct or indirect actions. This is especially important for self-employed workers who handle physical products and services, like repairs, transportation, warehousing, etc.
Professional Liability Insurance
This second type covers untoward incidents directly related to or as a consequence of your work, primarily of the financial nature. For example, a developer who mistakenly codes a faulty software that ended up costing his client money in operations losses will be protected by this form of insurance, provided that it is proven the damage is entirely accidental.
Business Owner’s Policy (BOP)
Similar to the previous insurance type, the BOP has a wider and more generic range of coverage, which can include financial liabilities, property damage, and other similar incidents within your place of work. Because of its more generic nature, BOP is also generally a cheaper alternative to the professional liability insurance.
Worker’s Compensation
A mandatory insurance policy that any employer must have, this business insurance must be one of the first policies you acquire when you begin to hire people for your company. This is a protection for your employees, generally covering a loss of income as a direct result of incidents at work, which may include lost wages and medical expenses.
As a self-employed individual, you are responsible for your own compensation, as well as the remuneration of any who might work under you. Protect yourself, your stakeholders, and your business with the right insurance policies. Secure your health insurance, disability insurance, and business insurance now.
