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Best Insurance Policies for Self-Employed Professionals

Posted by Arya Chatterjee

October 31, 2023

Shield yourself with these must-have insurances for entrepreneurs. 

The life of an entrepreneur is filled with contradictions. You do what you love and enjoy being your boss. As a self-employed professional or budding entrepreneur, you’re living the dream. But you don’t have the safety net of a big organization when it comes to ensuring your future. You are responsible for putting systems in place for your benefit. 

The most important part of the entrepreneurial journey is safeguarding your financial success, and insurance plays a crucial role, particularly self-employed insurance. Without the right coverage, a lawsuit, a natural disaster, or any unforeseen accident can throw off your success faster than you can say, “startup.” 

Remember that your insurance policy will always have your back, even when the business turns turbulent. Insurance isn’t just a legal necessity. It brings peace of mind and lets you focus on the more important things — like growing your business. 

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Insurance is an essential financial tool that serves as a safety net against unexpected challenges. It protects your income in case of disability, covers medical costs, defends against legal claims, and safeguards your professional reputation. Self-employed insurance is vital for financial stability, empowering entrepreneurs to pursue their dreams confidently and securely. 

Let’s discuss what insurance plans are available for self-employed people, thus ensuring that every entrepreneur has the power to secure their financial future.

The power of protection: Why do self-employed professionals need insurance?

1. The foundation of your well-being

As a self-employed professional, no employer provides you with a corporate health plan covering most illnesses. It means you’re alone if you fall sick or a health crisis strikes. You work out, eat healthy, and care for yourself. Still, accidents and unexpected health issues never knock before entering.

What you need: Health insurance

This one is non-negotiable for all entrepreneurs. In the unpredictable world of business, unexpected medical bills can be devastating. Having a solid insurance plan safeguards your well-being and finances. 

Key Benefits:

  • Self-employed health insurance offers physical and financial security.
  • Affordable health insurance for self-employed individuals is accessible through the Affordable Care Act (ACA) marketplace.
  • Other options include coverage of Medicaid and the Consolidated Omnibus Budget Reconciliation Act (COBRA).
  • Health insurance preserves savings and ensures access to essential medical care.
  • It allows you to focus on work and life with peace of mind.

2. Protect your earning potential

An unforeseen situation can hit anyone, from an avant-garde graphic designer to a game-changing entrepreneur. To guard against an accident or a disability, you need a firm insurance policy that saves you from a financial calamity. 

What you need: Disability insurance

Your business massively depends on your skill and your ability to work. So, suppose an injury or an unexpected illness throws you off the curve. In that case, disability insurance provides the financial protection you need.

Key benefits: 

  • Disability insurance offers income replacement during disability.
  • It ensures bills are not stuck even when you cannot work.
  • It is vital for self-employed individuals and entrepreneurs lacking sick leave or company-provided disability benefits.

3. Safeguard your business and assets

Being an entrepreneur is extremely rewarding, but it also comes with challenges. Your business represents a substantial amount of time, resources, and money. Imagine a client slips and falls on a coffee spill in your office. Insurance ensures your business stands strong if they choose to take legal action.

What you need: General liability insurance 

General liability insurance is a lifeline for entrepreneurs. In the litigious business world, it’s a safety net that protects your hard-earned assets and business reputation. 

Key Benefits: 

  • General liability insurance is essential for small businesses.
  • It protects against claims of bodily harm, libel, or property damage.
  • It also covers legal expenses, including lawyer’s fees, court costs, and settlements in case of lawsuits from clients, landlords, investors, or licensing boards.
Talk to us about how Escalon’s essential business services can help choose the right type and amount of insurance for your business.

4. Secure your expertise 

Entrepreneurs rely on themselves and their team’s expertise. However, human error is bound to happen at some point. But clients aren’t always very forgiving. Some can claim that your work led to financial losses. What would you do in a situation like this? 

What you need: Professional liability insurance 

As an entrepreneur, you must protect your business from errors, negligence, or omissions in services provided. Professional liability insurance ensures a slight misstep doesn’t derail your business success.   

Key Benefits: 

  • Also known as Errors and Omissions (E&O) insurance.
  • Acts as “oops insurance” for self-employed professionals and entrepreneurs.
  • Protects against client’s claims of financial losses or subpar work.
  • Provides defense and covers the cost of settlements or judgments.

5. Protect your space 

Whether you work from home, a co-working space, a cafe, or a hired office space, your workspace is your castle. Property insurance, also known as a Business Owner’s Policy (BOP), acts as your knight in shining armor, protecting your physical assets, including computers, office equipment, and any physical space you use for work.

What you need: Business owner’s policy (BOP)

BOP is a streamlined insurance that offers cost-effective protection tailored to your business’s unique needs. 

Key Benefits: 

  • A Business Owner’s Policy (BOP) is a comprehensive protection plan.
  • It combines general liability, commercial property, and business interruption insurance.
  • The policy suits freelance writers, designers, consultants, and entrepreneurs.
  • Safeguards against lawsuits, claims, and work-related accidents.
  • It is essential for protecting gear in theft, fire, or natural disasters.

6. Shield against digital threats

In today’s digital age, your business goes beyond the paperwork. It thrives in a digital cloud. With cyber-attacks at an all-time high, entrepreneurs and self-employed professionals have the most to lose. Insurance can help protect your online assets.

What you need: Cyber insurance

You must protect your company from cybercrime in today’s digital age. It’s an essential safeguard for your business, customers, and reputation in an online-first realm. 

Key Benefits: 

  • Cyber insurance safeguards entrepreneurs from data breaches.
  • It covers data recovery expenses, legal fees, and notifications to affected parties.
  • It is essential for protecting sensitive client data.
  • It ensures the security of your business and protects the client’s trust.

Bottom line 

Being a self-employed professional in the USA is a thrilling journey filled with independence, innovation, and boundless opportunities. However, as Peter Parker said, with great power comes great responsibility. 

Insuring your business and yourself should be one of the first things you do when stepping into self-employment. They’re a financial safety net and a secret weapon against unexpected challenges and potential hiccups.

With this arsenal of self-employed insurance policies in your corner, you can embark on a much more secure self-employed adventure with a shield of protection. Embrace the hustle, but remember your assets are your most significant earnings! Protect them.

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Want to know more about startups and what it takes to get started? Since 2006, Escalon has helped thousands of startups get off the ground with our back-office solutions for accounting, bookkeeping, taxes, HR, payroll, insurance, and recruiting — and we can help yours, too. Talk to an expert today. 

This material has been prepared for informational purposes only. Escalon and its affiliates are not providing tax, legal or accounting advice in this article. If you would like to engage with Escalon, please contact us here.


Arya Chatterjee
Arya Chatterjee

Arya Chatterjee is a freelance writer and consultant from Mumbai. With a background in journalism and over five years of creative writing experience working with legacy media like Architectural Digest and Femina India and brands like The Label Life, and Macy's, she crafts unique and compelling stories that engage the readers. She enjoys writing about health, beauty, fashion, and lifestyle and exploring the symbiotic relationship between thriving businesses and happy employees through her writing. She is always looking to explore new avenues to expand her creative energy.

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