Insurance for the Self-Employed

How to protect your sole-proprietor business with basic insurance
By Mary Sit, corporate writing/articles/Web content/scripts Mary Sit Communications 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:

1. 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.
2. 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.
3. 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 quotes

Search engines scan thousands of companies for preliminary quotes. These are consumer referral companies, not insurance companies, so you'll get competing quotes.
Try: Visit HealthInsurance.org., 2insure4less.com, or NetQuote, an easy-to-navigate site. eHealthInsurance.com gives quotes with only your zip code, gender and age. A bonus: no calls from agents.

Join an association for access to insurance benefits

If 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.
Try: Join the National Association for the Self-Employed and get group rates through its insurer of choice, The Mega Life and Insurance Co. You can also join the National Federation of Independent (NFIB) as a self-employed business owner and tap the insurance benefits they offer to members. NFIB membership is a smart choice that returns your membership costs many-fold.

Get up-close and personal

Prefer 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.
Try: Find qualified agents at the National Association of Health Underwriters. Research the company's financial health and complaint record at state insurance department Web sites.

Patience is not a virtue

If 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.
Try: Select a policy from 4-Disability-Insurance-Quotes, Insurance.com or LowQuotes.com.

Open a health savings account

Get tax-free savings while you stash money for medical emergencies. You're eligible if you have a high deductible health plan.
Try: Discover which plans are eligible at Self-Employed-Insurance.com.

Duck when an angry client sues

Errors and omissions insurance protects you from catastrophic lawsuits charging you with failure to perform professional duties.
Try: Compare quotes at Insurance Finder. Check out Insight Insurance Services and Herbert H. Landy Insurance Co. which specialize in certain professions. In the information technology business? See Techinsurance.

• 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.