Insurance for the self-employed need not be exorbitant. As an employer there are some types of insurance you must have under the law, and others that are voluntary. Costs of the various types of insurance you need, will of course depend on a number of things. They are:
Number of employees in your business.
Having 20 or more employees ensures you will receive the group rate for health insurance, including medical/dental/vision. You need not provide health insurance to your employees under the law, but morally you should. Any time an employee is out sick for an extended amount of time, the rest of the business suffers. Keep them healthy, provide medical insurance.
In Canada where I live, we only pay for glasses/dental work and prescriptions, so our health insurance costs a lot less than the US.
Where your business is located.
If your office space is rented, you must comply with insurance requirements in your lease. Fire and flood insurance is a must, and you should have theft and vandalism insurance. If someone steals all your computers, and you have no insurance your business may grind to a halt. Office insurance will depend not only on your space and cost of equipment, but on the location. Try not to pick an office space in the downtown core. Go a couple of blocks over and see your insurance premiums decrease.
Ask your insurance company to insure you against natural disasters. Many people do not realize this is extra coverage. After hurricane Katrina, we all need to be more careful. This type of insurance cost will also depend on your location. Living in an area not prone to hurricanes and tornadoes, will lower insurance costs.
If you or your employees become disabled.
Unfortunately here in Canada, it is not mandatory that employers of any type pay into the Workers Compensation fund. The result? If you don’t pay into this fund, and your employee becomes disabled as a result of an on-the-job injury, you will be probably be sued, and heavily. Stating that your employee knew you did not carry Workers Compensation Insurance, will not help you. If it is found your working conditions caused an injury, your employee may get a huge settlement that can wipe out your business. The solution? Many companies who do not pay into the Workers Compensation fund, instead have disability insurance added on to their health insurance. The costs are usually much lower, and there is less hassle than dealing with a government body fraught will technicalities.
If you are self-employed.
Running a business from home? You may need additional homeowners coverage to cover your business equipment in the event of fire and flood.
Buy your own medical plan, and insure the whole family.
Self-employed people are often advised to take out both disability and critical illness insurance. The second one allows you to recover in comfort from a serious surgery or lengthy illness, and acts as an income replacement of 60 percent during the time you are incapacitated. Being self employed myself this critical injury is crucial to my being able to take care of my family in the event I become seriously ill. Critical injury insurance (as in my case) can be purchased through the bank you do business with.
All insurance companies are not created equally. Check with your local Insurance Bureau and the Better Business Bureau, before dealing with any insurance company or representative.
Good insurance is safe insurance.