Business and personal insurance for self-employed workers

If you operate a sole proprietorship, there’s no legal separation between you and your business. In the eyes of the law, you are your business, which means that everything you own is lumped together in one basket. As a result, your personal assets, like your home, savings and car, can be at risk in the event of a legal dispute or an insured loss.

The right insurance coverage can help protect both your livelihood and your personal finances. Here, we'll look at the types of insurance that matter most for self‑employed Canadians looking to reduce the financial impact if something goes wrong. That’s real peace of mind.

Each of the following types of insurance covers a different risk. What you need depends on how and where you work, so it’s important to consider what you want to insure, based on your situation, so you can make the right decisions for you.

• Personal health insurance is designed to protect you as an individual and help safeguard your income.
• Home insurance aims to protect your personal property, your residence and your personal liability.
• Business insurance covers risks related to your commercial activities; this includes as liability or business interruption.

Having a combination of all three helps protect you, your home and your business.

You might think your home insurance policy already covers everything you need as a self-employed person, but that’s usually not the case. If you are self-employed and work from home, tell your insurer and review your policy. In some cases, optional add‑ons to your home insurance policy—such as coverage for professional activities—may be available. This could include coverage for business-use property, accounts receivable or personal injury.

But a dedicated business insurance policy could be a better option, especially if your work takes you outside your home, like visiting clients or renting a commercial space. The right coverage can help protect what you’ve worked hard to build. Below, we break down the main options worth considering.

Commercial general liability insurance is one of the most important types of protection freelancers and entrepreneurs can choose. It helps protect you if a third party makes a claim for bodily injury or property damage related to your business activities. Depending on the terms of your policy, your coverage could help cover legal defence costs, which can add up quickly.

If your work involves visiting clients, you already know that accidents can happen when you least expect them. For instance, if someone is injured or property is damaged while you’re working at a client’s location and a claim is filed against you, this type of liability insurance could help absorb certain costs tied to that claim. It’s a simple but powerful way to protect both your business and your personal finances.

Imagine you give a client advice in good faith, but it doesn’t land the way you intended. Say you’re an income tax preparer filing a client’s tax return, only it turns out the information they provided contained errors. When something like that happens and a client takes legal action over a professional mistake you’ve made, that’s where errors and omissions (E&O) insurance, or professional liability insurance, comes in.

Commercial property insurance helps protect the things you rely on to run your business, like your workspace, tools, equipment, materials and inventory. It can help if those items are damaged by things like a fire, vandalism or certain types of water damage. If you have a physical location or depend on merchandise, materials or essential equipment to do your job, this type of coverage is definitely worth considering.

Business interruption insurance, sometimes called loss of income insurance, can be added to your commercial property insurance policy. This type of coverage can be a big help if you're forced to slow down or shut down temporarily. If a covered loss occurs, it may help compensate for lost income and unexpected expenses. Having this type of coverage in place can reduce some of the financial pressure while you work to get your business back up and running.

Cyber risk insurance—also called cyber insurance—helps protect your business from technology‑related risks like data breaches or service interruptions caused by cyberattacks. And because cybercriminals are constantly coming up with new ways to target businesses, it’s smart to have protection in place. No matter your industry or the size of your operation, cyber risks are something you should be prepared for.

In Canada, self‑employed workers usually aren’t required to have insurance. That said, it really depends on what kind of work you do and the risks that come with it. Some regulated professions do require professional liability insurance, and clients may even ask to see proof of insurance before agreeing to work with you.

When you’re self‑employed, a lot of the risk falls on your shoulders. That’s why it’s a good idea to protect yourself. The right insurance coverage can help make sure that an accident, property damage or a lawsuit tied to your work doesn’t end up affecting your personal finances.

It depends. The cost can vary based on various factors tied to your situation. Monthly insurance premiums can range from $25 to $500,¹ depending on factors such as your industry, revenue and risk level. Coverage varies and may include exclusions, limitations and conditions defined in your policy. When selecting your coverage amount, it’s helpful to think about what you would realistically be able to afford if an unexpected event were to occur.

The cost of your insurance isn’t one‑size‑fits‑all. It’s based on your work and your situation, including:

• The type of work you do and the risk involved
• Your business revenue
• Where you work (at home, in a commercial space or at your clients’ locations)
• The coverage you choose and how much protection you want
• Your deductible (choosing a higher deductible can sometimes lower your premium)
• Your claims history

You might be wondering if it makes sense to purchase both business insurance and personal health insurance. For self‑employed workers, it can be a good idea. Insurance helps keep you stable both at work and in your personal life. It’s there to protect you if something goes wrong in your day‑to-day work. Certain types of personal health insurance can help if a health problem affects your ability to earn an income.

As a freelancer or entrepreneur, your situation is unique. Your work, your health and your ability to earn an income are closely connected. Since you are your business’s most important resource, the line between your working life and your personal life is blurred. That’s why it’s worth considering personal health insurance too, to protect you not just as a business owner, but as a person.

If you’re self‑employed, getting sick or having an accident can mean a sudden drop in income. Disability insurance can play an important role in maintaining your standard of living and helping you meet your financial commitments.

These monthly benefits replace part of your income, allowing you to cover ongoing expenses and reduce the risk of financial instability. Coverage varies depending on your situation and your needs.

Here are a few questions to ask yourself when considering disability insurance:

• How long do you have to wait before you receive benefits?
• How long do the disability benefits last?
• What is the risk level associated with your profession?
• What is the definition of disability in the policy when it comes to your own occupation?

Critical illness insurance can work alongside disability insurance to offer extra protection if you’re diagnosed with certain serious illnesses covered by your policy, such as cancer or some heart conditions. You can use the benefit you receive to do things like cover medical expenses or treatments that aren't covered by your public plan, make changes to your home to meet new needs or make up for lost income if your spouse or partner wants to stop working to care for you full-time.

Running a business means juggling a lot of responsibilities—and risks. An incident, loss or legal dispute can disrupt business and lead to significant costs. Below is an overview of some insurance options that can help protect your business.

Commercial insurance coverage is designed to protect self employed workers whose business activities go beyond what home insurance can cover.

Coverage can include:

• Liability for bodily injury or property damage to third parties
• Equipment breakdown
• Commercial property and equipment
• Business interruption
• Cybersecurity coverage
• Errors and omissions coverage
• Other optional coverages based on business needs

Good to know: Coverage is tailored to the type of activity, revenue and risk level. This type of insurance provides broader and more appropriate protection for business operations.

Who it’s generally suitable for: Self-employed workers who operate from home, from a commercial space or at clients’ locations.

Examples of sectors: Retail, wholesale, manufacturing, construction, professional services and beauty services.

These types of insurance can provide coverage to protect your home or your person. More specifically, home insurance may be relevant for self‑employed individuals who work from home, depending on the nature of their professional activities.

Here are some types of self-employed insurance² that can be added to your home insurance:

• Business general liability for your professional activity
• Increase in the insured amount for property used for business purposes
• Accounts receivable
• Business interruption and extra expenses with limited coverage

Good to know

• Eligibility for the self‑employed product depends on the nature of the professional activities.
• The scope of coverage is generally limited, and additional coverage may be required.
• Professional activities must be declared and accepted by the insurer.

Who it’s generally suitable for: Self employed workers who operate from home.

Examples of sectors: White-collar professions (such as accountants, lawyers and engineers), education and childcare services (such as music teachers and singing teachers), health services (such as massage therapists, dietitians and nutritionists), and general services (such as photographers and hair salons, excluding the ones that offer aesthetic treatments, tanning salons and massage services).

Disability insurance and critical illness insurance are types of coverage that could help protect you if you had to temporarily stop working due to illness or disability.

Who it’s generally suitable for: Self-employed workers who operate from home, from a commercial location or at clients’ premises, and who want to protect their income and financial stability.

The more involved you are in your business, the more important it is to protect yourself both professionally and personally. Taking the time to get personalized advice from your insurer can help you see the bigger picture so you don't risk underestimating how a claim or legal dispute could affect your finances. Costs like relocating, paying employees or meeting ongoing contract obligations can add up quickly.

You and your business are unique. That's why it's important, as a small business owner, that you find insurance coverage that fits your situation. That way, you can help protect both your personal assets and everything you’ve worked hard to build.

Have questions or want to explore your options? Get in touch with us to request a quote or talk through your coverage needs. Our team is here to help you find the insurance policy that’s right for you.

Learn more:

1. Cost estimates are provided for information purposes only. 

2. Coverage may vary based on the policy and the insurer you choose.

Home and commercial insurance products are underwritten by Desjardins General Insurance Inc. in Quebec, and by Certas Home and Auto Insurance Company, in Ontario, Alberta and New Brunswick.

Life insurance and living benefits products are manufactured by Desjardins Financial Security Life Assurance Company. Individual insurance products (Disability and Critical Illness) are offered exclusively through financial security advisors.

These tips are provided for information and prevention purposes only. They are general in nature, and Desjardins Insurance cannot be held liable for them. We recommend using caution and consulting a certified insurance agent for comprehensive, tailored advice.

Certain conditions, exclusions and limitations may apply.

The terms and conditions governing the coverage described are set out in the insurance policy, which prevails in all cases.