Self-employed workers

Self-employed individuals face particular challenges when trying to secure financial protection against a serious illness or accident. They must set up their own financial protection and maintain their client base.

Protecting yourself financially before a serious illness

Long Term Disability Insurance

One of the most important ways for self-employed people to protect themselves is through long-term disability insurance. If an illness or accident prevents you from working for several months, how do you ensure you have an income? That is what long-term disability insurance offers.

Self-employed workers and EI sickness benefits

Self-employed workers can access EI special benefits, including sickness benefits, by registering with the Canada Employment Insurance Commission here.

You can register with the Canada Employment Insurance Commission through Service Canada if you operate your own business or work for a corporation but cannot access EI benefits because you control more than 40% of the voting shares of the corporation. You must be a Canadian or have obtained permanent residence in Canada.

Short and Long-Term Contingency Plans in Case of Illness

What would happen to your business if you were unable to work for two weeks?

What would happen to your business if you were unable to work for ten months?

To address these situations, you need to have both a short term and a long-term contingency plan. The purpose of both contingency plans is to keep the business running if a major unforeseen problem occurs. Start by identifying the key people who can step in to maintain a minimum level of service and assume key responsibilities, and who can understand the critical operations needed to do so.


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Some of the most comprehensive advice on contingency planning can be found in media aimed at entrepreneurs. However, this media often conveys the entrepreneurial ideology that “entrepreneurs don’t get sick.” Everyone needs time to rest and everyone can get sick. In fact, one in six Canadians will be disabled for three months or more before the age of 50. So you need to make clear contingency plans, both short-term and long-term, and talk to the people you rely on to support you should the need arise.

Short-term contingency plan

For a short-term absence, you need to decide who can be trained to take over your primary responsibilities in the short term. Primary responsibilities refer to the essential tasks needed for your business to meet its critical responsibilities.

This may be a trusted person who works for you or your partner. You need to talk to this person ahead of time so they know and agree to be your backup in case of an emergency.

It is suggested that you have a notebook outlining the basics of your job and company that would allow another person to take over and ensure that your key responsibilities are met. It is also suggested that you identify the key personnel needed to provide a minimum level of service.

If your plan takes a day or two to implement, it is important to use automated responses that inform your correspondents that you are temporarily out of the office due to an emergency, but that you will promptly respond to all messages upon your return. It can be helpful to keep several pre-written automated responses that you can set up quickly.

Long-term contingency planning

There are a variety of elements to consider for your long-term contingency plan, but they can mean the difference between survival or serious trouble for your business.


Just as with the short-term plan, you need to decide who will temporarily take over your business. For how long can this person take over? What are the constraints they face? Obviously, you need to talk to them about your plan.


Do you have an emergency fund to cover unexpected expenses related to a leave of absence? Will your salary be covered by the company while you are away? Is there any additional insurance you will need? The person replacing you will need to understand the financial arrangements.

Legal Liability:

Depending on the nature of your business, decision making can have major consequences. If someone takes over for you, do they have the autonomy to make decisions for you? Do you need legal advice to define the decision-making authority that person would have?

Your current partners and family:

Are those closest to you and most affected by your business informed of your long-term contingency plan and comfortable with the person you have named to replace you?

Put it in writing:

Have you written your plan and given copies to the important people involved?

Test your plan:

It is strongly suggested that you test your plan. Take some time for yourself and ask the person you have designated to take over the business to step in and run the business according to the plan. A small exercise may reveal significant gaps, but the person who will take over during the test will be able to contact you for advice on issues that are unclear.

Update the plan as needed:

A business evolves and your emergency plan will need to evolve with it. Also, people move, or their circumstances may change, making it no longer possible for them to be your backup. You may need to find a new person for your emergency plan.

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