Having your own business requires a lot of different insurances. You likely have vehicle insurance for your service truck, WCB, and liability insurance in order to get work. Outside of those basic policies, you may also have tool insurance, home insurance, health insurance, accident insurance, critical illness insurance, or life insurance. But which one is the most important insurance to carry?...
As an independent contractor, your biggest asset is your ability to earn an income. That makes it your largest risk as well. If you earn $50,000/year, that equals $1million over 20 years. If you earn $100,000/yr, that equals $1million over 10 years or $2million over 20 years. Earnings that you may not realize if you become disabled and are unable to work. The risk is greater if you have dependents. And the risk increases even more if you have dependents and you are the sole income earner - a single income family.
Being in business can be risky. A lot of that risk revolves around assuming ownership of outcomes. We cannot delegate risk protection to our bosses, or the HR department. We are responsible for insulating ourselves from risk to the same extent that we do it for our clients. If you plan to run a painting business for several decades, there is a good chance that you will experience something that will prevent you from working for a period of time - perhaps just a few months, or perhaps permanently. How would you handle that potential situation? There is a good chance that at some point we may get into a car accident, break something skiing or playing sports, hurt ourselves at work, contract a debilitating illness, or otherwise become disabled.
You may already have a plan in place. Perhaps your spouse can become the provider, or run your business while you recover. That may not always be an option depending on whether you have a spouse, what their health is like, how much income they could potentially generate, and how much care you and the rest of the family would require.
Perhaps you have no debt, minimal expenses, while having a nice savings stashed away. Maybe you can draw from equity, investments or extended family.
But if you realize that you may not be sufficiently covered for your current needs should something go wrong, it would be good to make a plan. Disability insurance might be a good tool that can help you sleep a bit better at night, while keeping stress to a minimum when something happens that interferes with your ability to work. The younger and healthier you are, the less you may feel you need it. Ironically, that is the best time to get a policy in place as it will be easier to qualify and far cheaper.
Talk to a professional for advice on the degree of protection you may require as well as all the options for coverage available.
Don't underestimate your biggest asset - your ability to get up and go to work everyday. Look after your family the way you look after your customers and things will turn out great.