As a business owner, I have always been concerned about making sure that I have the insurance coverage my family needs to remain protected. Without a traditional employer to offer access to discounted health, disability and life insurance, you might not think about what you need as a business owner.
As you move forward and grow your business, here are some things to consider when it comes to your insurance situation:
Health Insurance
Perhaps the most challenging insurance coverage to obtain when self-employed is health insurance. If you have a partner with a more traditional job, you might be able to coordinate your coverage and obtain what you need. If this isn't an option, you will need to make sure you are covered. Not only can it ensure that a health emergency doesn't break the bank, but obtaining health coverage is a matter of federal law.
Start with your state's health exchange. If it isn't open enrollment time, you will need to be in the process of experiencing a major life change in order to qualify. Look to see what is available, and what will fit your needs. You will pay more for coverage obtained on your own, without an employer to help subsidize the cost. However, you can receive a tax deduction for the health insurance costs you pay as a business owner.
Life Insurance
"Many companies offer access to life insurance plans," says Ross Quade, of TermLifeInsurance.com. "When you're self-employed, it's easy to overlook life insurance. However, it's vital to your family that you obtain coverage."
Think about the hardship that your family might experience if you pass on. How will your family be supported? How will your debts be paid off? Quade suggests using the Internet to look for quotes so you can find the best rates for the coverage you need. At the very least, it makes sense to get term life insurance coverage that will provide for your family until your children are all grown.
Disability Insurance
"This is another policy that many workplaces offer, but that you might not think about as a self-employed person," says Quade. However, disability can strike you, and make it difficult for you to perform in your business. When this happens, you want to know that a portion of your income will be replaced so that your family can meet its obligations and be taken care of. Again, it's possible to find disability insurance by looking online. You can also self-insure against most catastrophes by building up a substantial emergency fund.
Business Use of Your Home
I recent moved and had to obtain renters insurance. I asked my agent about coverage for my home office, and he said that there was limited coverage -- up to $1,000 -- for the items in my home office. Liability coverage and additional insurance coverage wasn't included. An additional waiver is required if I want better coverage for the business use of my home.
Whether you rent or own, you need to make sure your renters or homeowners policy properly covers the business use of your home. You don't want your home office or workshop destroyed, or to be on the hook for liability claims made by clients who come to your home business premises.
Other Business Insurance Coverage
Finally, don't forget other insurance coverage. "Many business owners find that they need errors and omissions insurance," Quade points out. "If you are a professional providing services or advice, you need to be ready to protect yourself against people who blame you for their losses."
Consider the type of business you have, and what could go wrong. If you need some additional coverage, make sure to obtain it. You don't want your business to be ruined by others. Protecting your assets and your family is just as important as growing your business. In fact, without the right the insurance, you might see a setback to your business.
"It's not pleasant to pay insurance premiums," says Quade, "but the right coverage for your situation can protect your finances."