Entrepreneurs and self-employed workers: Do you have the right coverage?

Starting a business is an opportunity to build a company that could grow in value and become a source of pride. To adequately protect your business¹, your loved ones and yourself in the event of the unexpected, it’s important to learn about insurance tailored to your specific needs.

Life insurance: Pay off debt and protect your wealth

What would the financial consequences be for your loved ones if you died suddenly? If you have a partner or children, could they afford to stay in the family home? Could they maintain their lifestyle? What about estate taxes? Would your business be able to pay any money it owes to creditors or suppliers?

“Life insurance can be used to honour financial commitments and make up for income that loved ones can no longer rely on”

- Jeffrey Morrow, Financial Security Advisor, Desjardins Insurance

Death in the event of multiple shareholders

When a company (corporation) has multiple shareholders, it is recommended that a shareholder agreement be put in place to clarify certain situations, including the death or departure of a shareholder. When a shareholder dies, their shares are transferred to their heirs/assigns/legatees, unless a shareholder agreement or the company’s articles of incorporation state otherwise. This situation is not ideal if the heirs/assigns/legatees aren’t interested in being part of the company’s shareholder structure. Similarly, the company’s remaining shareholders may not want others, in this case the deceased shareholder’s heirs/grantors/legatees, to join the ownership structure.

“Life insurance can be used by surviving shareholders to buy back the deceased’s shares at fair market value.”

- Jeffrey Morrow, Financial Security Advisor, Desjardins Insurance

Disability insurance: Make up for lost income

When an entrepreneur or self-employed worker takes leave due to disability, their income is affected. Disability benefits paid out under these circumstances are meant to provide the insured with a portion of their usual income while they are unable to work. When an entrepreneur or self-employed worker is on disability leave, their business operations can also be impacted. We have insurance products that can help. Coverage may vary, depending on each business’s situation and needs.

“Disability insurance has a lot of features to assess. Beyond the cost of the premium, it’s important to choose a product that meets your needs.”

- Jeffrey Morrow, Financial Security Advisor, Desjardins Insurance

Here are a few things to consider:

The waiting period before you receive benefits
The duration of the benefit period
The policy coverage in relation to your usual occupation

Critical illness insurance: Protect yourself and your business

This insurance supplements disability insurance by offering additional coverage for specific illnesses, such as cancer or certain heart problems.²These benefits can be used to pay for treatments that aren’t covered by the public plan, make any necessary changes to your property or make up for lost income if your spouse needs to stop working to care for you.

“Disability insurance has a lot of features to assess. Beyond the cost of the premium, it’s important to choose a product that meets your needs.”

- Jeffrey Morrow, Financial Security Advisor, Desjardins Insurance

As soon as you start your business project, meet with a financial security advisor to set up the necessary coverage. Think about reviewing your coverage whenever you reach a major milestone: when you incorporate or hire employees, on the arrival or departure of a shareholder, during a period of strong growth and, eventually, when you transfer your business to a successor.