If you’re self-employed, you already know it’s a completely different ballgame you’re playing. It’s a fast-paced, empowering, and often unpredictable position to be in. But while you’re busy building your business and keeping clients happy, there’s one major risk many freelancers, consultants, and small business owners continue to overlook: disability insurance. Unlike salaried employees, you don’t have a safety net. No HR department is there to offer benefits or accommodate you if an unfortunate event were to happen. If you can’t work due to illness or injury, your income can come to a complete halt. That’s a scenario far too many self-employed Canadians are unprepared for.
Canada’s self-employed workforce is growing steadily. As of early 2025, nearly 2.7 million Canadians, roughly 13% of the workforce, are self-employed. That number includes entrepreneurs, gig workers, creative professionals, and solo consultants across various industries. This shift toward independent work is exciting for those who undertake the change, but it comes with its own set of challenges, chief among them is the lack of benefits and strong safety net.
According to new data from Statistics Canada, self-employed Canadians are significantly less likely to have access to health-related benefits compared to employees. While 67% of employees have access to supplementary health care plans, only 43% of self-employed people do. When it comes to dental coverage, that number drops even lower to just 36% of self-employed workers who have coverage. Though perhaps the most alarming stat is this: only 25% of self-employed Canadians have disability insurance. That’s less than half the rate of standard employees, where 57.1% have some form of income protection in place.
Let’s break it down. Disability insurance is designed to replace a portion of your income if you become unable to work due to illness or injury. That includes everything from a long-term condition like cancer or heart disease to a short-term disability like a broken leg or severe burnout. For salaried workers, many employers offer some level of protection. If they need time off to recover, their benefits plan often covers a percentage of their income. However, if you’re self-employed, that support system doesn’t exist. You’re responsible for your own safety net. Many entrepreneurs and freelancers rationalize the decision to avoid purchasing disability coverage because they think they either they won’t need it, or that it’s too expensive to bother with. Although this isn’t an uncommon thought pattern when it comes to insurance, anyone who depends on their income to pay bills, support a family, or keep a business afloat should seriously consider disability insurance, or else one unfortunate incident could derail their entire livelihood.
With regards to cost, it’s true that premiums for a disability insurance plan can vary based on age, occupation, and health, but that doesn’t mean it’s unaffordable. In fact, many insurers offer flexible plans specifically tailored for self-employed workers. You can adjust your coverage based on your income, risk level, and how long you could go without a paycheque before it becomes a problem. Some plans even allow for add-ons like partial disability coverage, which provides support if you’re able to work a little, but not at full capacity. Additionally, the premiums are often tax-deductible as a business expense which means protecting your income can also be a smart move financially.
Consider this scenario: You’re a graphic designer who runs your own studio. You’re doing well, you’ve got clients, your workflow is steady. Then, out of nowhere, you get injured in a car accident. You’re unable to sit at your desk for more than 20 minutes at a time, let alone complete projects with quality or meet deadlines. With no disability coverage, you’re relying on savings, which might last a few weeks if you’re lucky. Your invoices stop going out, your rent is still due, and clients start moving on. Now, you’re not just dealing with an injury, you’re also trying to rebuild your business from the ground up. Unfortunately, this isn’t a rare situation. Accidents and illnesses don’t discriminate, and they certainly don’t wait for a “convenient” time to strike. Disability insurance is what helps you stay afloat during those difficult moments, giving you the time and support to heal without risking financial ruin.
Shopping for disability insurance doesn’t need to be overwhelming. The key is to work with a trusted advisor who understands the self-employed landscape. Look for a plan that offers “own occupation” coverage, which means you’ll receive benefits if you’re unable to perform your specific job, not just any job. Also, pay attention to the elimination period (how long you wait before benefits kick in), the benefit period (how long they last), and whether the plan offers partial or residual benefits for reduced work capacity. Ideally, the policy should reflect your current income, but also be flexible enough to adapt as your business grows. You may also want to consider bundling your disability insurance with other forms of protection like life insurance or critical illness coverage, which can sometimes lower your overall premium.
If all of this sounds intimidating, don’t worry, you’re not alone. But getting started is easier than you might think. The first step is simply acknowledging the risk. From there, speak with an advisor who specializes in working with entrepreneurs and freelancers. They can walk you through your options, answer questions, and help you choose a plan that fits both your needs and your budget. Think of it as business continuity planning, because that’s exactly what it is. You insure your equipment, your office, maybe even your car. Isn’t it time you insured your income too?
Being self-employed comes with a lot of freedom, but that freedom also comes with responsibility. You’ve worked hard to build your career and your reputation. Don’t let a health setback undo all that progress. Disability insurance may not be flashy or exciting, but it’s one of the smartest financial decisions you can make as a business owner. It’s about giving yourself peace of mind, knowing that if life throws a curveball, you won’t be left scrambling. So take a moment today to think about your own coverage—or lack thereof. You owe it to yourself, your business, and your future.
