Working as a solopreneur has a ton of benefits, but one disadvantage is that you won’t have an employer to provide you with insurance. Not all employers offer insurance to begin with, but if you’re used to being enrolled as a full-time employee with a robust employee benefits package, you might feel like you’re in over your head when trying to make insurance-related decisions on your own.
In this guide, we’ll explore some of the most important types of insurance to consider as a solopreneur, and how to find the best policies.
Types of Insurance Every Solopreneur Should Have
These are some of the most common types of insurance policies pursued by solopreneurs:
Health, dental, and vision insurance
Most employers offer their full-time employees a combination of health-related insurance policies, including health insurance, dental insurance, and vision insurance. Even if you’re in good health and take care of yourself, this insurance is vital to stay in good shape. Not only will it encourage you to take more proactive care of your body (like attending regular checkups), but it will also greatly reduce the costs of medical treatment if you ever need it.
Long-term disability insurance
You’ll also want to have a long-term disability insurance policy in place. Through the Social Security Administration (SSA), you can get access to limited long-term disability benefits if you’re ever disabled and unable to work for an extended period of time. However, these benefits are often minimal, and the application process can take months. A private long-term disability insurance policy can provide you with much more robust coverage.
Life insurance
Life insurance is a high priority for solopreneurs who are supporting a spouse and/or family. If you die unexpectedly, your family may be left without a source of income on top of managing expenses related to your death. Life insurance policies are often simple and inexpensive, granting benefits to your recipients of choice upon your death.
Liability insurance
Almost any kind of business can benefit from having some type of liability insurance in place. If you’re a contractor, or if you’re providing services to your clients, you’ll need a general liability insurance policy to protect you from legal action. If you’re creating products, a product-specific liability insurance policy may be better. And if you want some extra protection above and beyond what your typical liability insurance policies are providing you, you can always purchase an umbrella liability insurance policy; this policy will pay out if you ever exceed the limits of your other policy.
Home and/or car insurance
You likely already have policies for home insurance and car insurance (assuming you own a house and a car). However, if you use your home or your car for business purposes, these policies may not be enough to protect you. A traditional car insurance policy, for example, won’t cover damages sustained while the car was being used for business. Make sure you review your existing policies carefully to determine whether you need to add new terms.
Business interruption insurance
Some solopreneurs also choose to invest in business interruption insurance. As the name suggests, this insurance policy is designed to protect you in case your ability to run the business is interrupted. Natural disasters, sudden business changes, and other unexpected developments could all impact your business’s ability to generate revenue, but the right insurance policy can provide you with revenue in the meantime.
Tips on Choosing the Best Insurance Policies
Knowing which types of insurance policies you need is only half the battle. You’ll also need to investigate and research to choose the right providers and specific policies. Therefore, be sure to consider:
Provider reliability
Different insurance companies have different reputations. Some may be particularly reluctant to pay out the full benefits stated on a policy, while others may be more customer-oriented. Make sure you read online reviews and testimonials to get a better picture of how they’ve performed in the past.
Bundling options
Most insurance companies offer steep discounts to buyers who want multiple policies simultaneously. If you get all your insurance policies from the same provider, you’ll end up paying far less.
Key variables
There are a lot of variables to consider with each type of insurance policy, so it’s often difficult to compare two policies from different providers. It may seem like one policy is less expensive, but it may offer less robust coverage in some important way. Thus, do your research to make sure you understand the ins and outs of each policy, and when comparing two different policies, try to compare them apples to apples.
If you’re just starting out as a solopreneur, insurance may not be your highest priority. However, it’s something you shouldn’t procrastinate on purchasing. The sooner you acquire the insurance policies you need to protect yourself and your business, the better.
