You've living your dream: Self-employed and making a living. Whether you're a freelance artist or engineer, you need to protect your business by buying some basic insurance, including health, disability, liability and errors and omissions coverage.
Three things you need to know about insurance for the self-employed:
- About 60 percent of the 45 million uninsured Americans are self-employed or small business employees. Don't give up. Find affordable health insurance by using the Web for instant quotes, joining associations for price breaks, and buying a plan with a high deductible and lower premium.
- If you have a history of earning income from your occupation, consider disability insurance, a safety net that helps you pay the bills if you're hit by a long-term illness or accident. Every year 12 percent of American adults suffer a long-term disability before age 65.
- Buy errors and omissions insurance to protect yourself from professional mistakes. If you're slammed with a lawsuit charging professional negligence, this can help you swim, not sink.
Surf the Web for instant free quotesSearch engines scan thousands of companies for preliminary quotes. These are consumer referral companies, not insurance companies, so you'll get competing quotes.
Join an association for access to insurance benefitsIf you belong to a club, ask if it has a group health insurance plan. If you're a loner, join a professional organization or small business association.
Get up-close and personalPrefer high touch to high tech? An exclusive local agent is well-trained but only sells his company's plans. A non-exclusive local agent can customize a plan for special circumstances.
Patience is not a virtueIf your business is your sole source of income, get disability insurance with as short a waiting period as possible. Policies typically require 30 to 180 days before they start paying – but try negotiating.
Open a health savings accountGet tax-free savings while you stash money for medical emergencies. You're eligible if you have a high deductible health plan.
Duck when an angry client suesErrors and omissions insurance protects you from catastrophic lawsuits charging you with failure to perform professional duties.
- Deduct 100 percent of your health insurance premiums from taxes.
- If you're leaving a company to work for yourself, a short-term health insurance plan may be cheaper than coverage under COBRA, the federal law that allows you to stay with your employer's insurance for 18 months after you depart.
- Buy insurance when you don't need it. The young and healthy get cheaper rates.