Self Employed? Why Disability Insurance Deserves a Second Look.

As of March 2025, only 25.3% of self-employed Canadians had disability insurance, compared to 57.1% of employees who had access to disability coverage through an employer. Self-employed workers now make up 13.1% of Canada’s workforce, and that share is only growing.

A gap hiding in plain sight

That coverage gap isn’t really about self-employed people underestimating the risk. It’s more that the safety net most employees don’t think twice about (group benefits, sick leave, an employer who can absorb a temporary absence), simply isn’t there when you run your own business. Statistics Canada’s Labour Force Survey found self-employed workers trail employees on nearly every form of workplace coverage, and disability insurance is where the gap is widest.

What’s actually at risk

It’s tempting to think of disability as something that happens to people in physically demanding jobs. RBC Insurance notes that only about 8% of disabilities come from workplace accidents or car collisions. The rest come from things like cancer, cardiovascular disease, mental health conditions, and musculoskeletal issues, conditions that can affect anyone, in any line of work.

For a self-employed person, the exposure isn’t just the lost paycheque. It’s decades of future earning power tied up in one person’s ability to keep working. To frame it simply: your income, compounded over a career, is often your single largest financial asset, larger than your house or your savings.

What disability insurance actually does

Disability insurance replaces a percentage of your usual income, typically on a monthly basis and often tax-free, if you’re unable to work due to illness or injury. That’s a different shape of protection than critical illness insurance, which pays a lump sum tied to a specific diagnosis: disability insurance is built to replace ongoing income for as long as you’re out of work, often for two to three years or more depending on the policy.

For someone running their own business, that steady monthly replacement can be the difference between weathering a health setback and needing to wind down what you’ve built.

Worth a look if you haven’t reviewed it

If you’re self-employed and have never looked into disability coverage, or it’s been a while since you have, please Book a meeting with us and we’ll help walk you through what coverage would actually fit your situation.

References:

• The Daily — Labour Force Survey, March 2025, Statistics Canada