Can self-employed people get disability insurance?

Absolutely. You can set up an individual policy to replace your income, plus business overhead expense coverage for your fixed business costs. Only about 25% of self-employed Canadians have coverage today (Statistics Canada, 2025), so most are going without — usually because no one showed them the options.

How much does disability insurance cost for someone self-employed?

For a healthy professional, generally 1–3% of income a year. Your occupation class is the biggest factor — desk-based work is the least expensive; trades and physical work cost more.

Is disability insurance tax-deductible if I'm self-employed?

Individual coverage premiums aren't deductible, but the benefit is tax-free when you pay personally. Business overhead expense premiums are deductible as a business expense, and those benefits are taxable. We'll set up the structure that fits you.

Isn't EI enough if I've opted in?

Not for long. EI sickness benefits are 55% of earnings to a $729 weekly maximum (2026) and last only 26 weeks, with a waiting period to qualify.

My income changes every year — can I still qualify?

Yes. Carriers underwrite variable income using your tax returns and notices of assessment, and there are options if you've recently gone self-employed.

What if I've been turned down before, or have a health condition?

It may still be possible, sometimes with an exclusion or an adjusted premium. The carrier you apply to makes a difference as well. We've placed coverage for clients with a range of health histories. If you're curious, it's worth a conversation to check before assuming the answer is no.

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Disability Insurance · Self-Employed · BC

Disability Insurance for Self-Employed British Columbians

When you work for yourself, your income has no backup. Let's build one.

There's no group plan, no paid sick leave, and very little EI when you're self-employed. If a serious illness or injury stops you from working, the income simply stops. We're an independent, family-run brokerage in BC, and we set this up for freelancers, contractors, tradespeople, and incorporated professionals every week.

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Self-employed professional working in their own business in BC

Self-employed Canadians with coverage

Only 25% — 3 in 4 have none

Statistics Canada, 2025

The short version

Self-employed British Columbians can protect their income two ways: an individual disability policy that replaces your personal earnings, and business overhead expense coverage that keeps your fixed business costs going while you recover. Only about 25% of self-employed Canadians carry any disability coverage (Statistics Canada, 2025). Most people don't know about it, or don't understand it. For a healthy professional, premiums usually run about 1–3% of income, and the benefit is tax-free when you pay the premium yourself.

DD

Written by Danika Dickson, MSc.
Reviewed by Tim Dickson · Licensed Insurance Advisor (LLQP)

Insurance Council of BC #LIC-2021-0030743-R01
Licensed in BC, AB & ON · Last reviewed June 2026

Why self-employment changes everything

When you're on a payroll, a lot happens quietly in the background: a group disability plan, EI you've been paying into, sometimes paid sick days. When you work for yourself, this planning falls back to you.

25% vs 57%

Only 25% of self-employed Canadians have disability coverage, compared with 57% of employees (Statistics Canada, 2025). Roughly three in four self-employed people have nothing replacing their income if they can't work.

The good news is that you can get coverage specifically built for a self-employed person. A good advisor knows how to navigate the challenges you might face (such as variable income), explain contract options, and get a strong product in place for you.

The two layers of coverage you need

There are two complementary types of disability coverage you can get. Most self-employed clients need both working together.

1 · Individual disability coverage

Replaces your income. Pays you a monthly benefit if a serious illness or injury keeps you from working. You choose the amount (usually 60–85% of income), the waiting period before it starts, and how long it pays — to age 65 is the gold standard.

Funded personally → the benefit is tax-free.

2 · Business overhead expense coverage

Keeps the business running. Reimburses your fixed costs — rent, utilities, lease payments, staff wages — usually for 12 to 24 months while you recover. For a solo professional with an office, staff, or equipment, this may be the difference between pausing and closing.

Premiums tax-deductible as a business expense; benefits taxable.

What about EI and WorkSafeBC?

Access to EI and WorkSafeBC benefits are two common (and incorrect) assumptions worth clearing up.

EI sickness benefits

Self-employed Canadians can opt into EI special benefits. However, you have to register ahead of time, there's a waiting period before you're eligible, and the benefit is 55% of earnings to a maximum of $729 a week (2026) for only 26 weeks. If you have opted in, it's a short-term bridge, not income protection. If you haven't opted in, there is no benefit available.

WorkSafeBC

Coverage applies to work-related injury or illness only. Many self-employed people aren't automatically covered at all and would need to buy Personal Optional Protection — and even then it doesn't help with an illness or an off-the-job injury.

Private disability coverage

Works 24/7, on or off the job — built around your real income, not a government formula.

Built around variable income

A common worry we hear: "My income jumps around — can I even get covered?" Yes. Carriers underwrite self-employed income all the time; the key is documenting it well.

What helps your application Your last two years of tax returns (T1 and, if incorporated, T2), your notices of assessment, and a clear picture of net business income. If you've recently gone out on your own, some carriers offer coverage based on your projected or prior employment income for the first while. This is exactly the kind of thing your advisor sorts out before the application goes in, so the offer comes back reflecting the income you actually earn.

Personally owned or through your corporation?

If you're incorporated, you have a choice about how the coverage is owned — and it changes the tax treatment.

Owning an individual disability policy personally means premiums aren't deductible, but the benefit is tax-free. Business overhead expense coverage is typically owned by the corporation, where the premium is deductible. The right structure depends on your situation, and it's worth modelling both before you decide. We'll walk you through it in plain language and can liaise with your accountant if it helps.

→ Read the full disability insurance guide
Definitions, riders, costs, and how policies are built — the complete Canadian picture.

What about trades?

BC tradesperson at work on a job site — **Physical occupations are insurable** — but occupation class, the definition of disability, and carrier choice all matter more.

If you frame houses, cut hair, fix cars, or run a job site, most disability advice online isn't written for you (generic articles usually assume an office or desk job). The coverage still exists for you, but the planning is different. The main difference is the occupation class, so your premium will be higher. Importantly, the policy's definition of disability matters even more, not less. Carrier choice matters too, because some take a much friendlier view of physical occupations than others. Comparing your options is our job — and we can answer your questions.

How we help self-employed clients

We help with planning your coverage and preparing for the application and underwriting — including the financial part.

Document your income properly so the offer reflects what you really earn.
Pair the two layers — personal coverage and business overhead — so nothing falls through the gap.
Compare Canada's major carriers to match your occupation class to the right one.
Stay with you as your income grows, increasing coverage along the way.

Curious what this looks like for your situation? Compare coverage for me — we'll bring back real options.

Frequently asked questions

Can self-employed people get disability insurance?: Absolutely. You can set up an individual policy to replace your income, plus business overhead expense coverage for your fixed business costs. Only about 25% of self-employed Canadians have coverage today (Statistics Canada, 2025), so most are going without — usually because no one showed them the options.
How much does it cost for someone self-employed?: For a healthy professional, generally 1–3% of income a year. Your occupation class is the biggest factor — desk-based work is the least expensive; trades and physical work cost more.
Is disability insurance tax-deductible if I'm self-employed?: Individual coverage premiums aren't deductible, but the benefit is tax-free when you pay personally. Business overhead expense premiums are deductible as a business expense, and those benefits are taxable. We'll set up the structure that fits you.
Isn't EI enough if I've opted in?: Not for long. EI sickness benefits are 55% of earnings to a $729 weekly maximum (2026) and last only 26 weeks, with a waiting period to qualify.
My income changes every year — can I still qualify?: Yes. Carriers underwrite variable income using your tax returns and notices of assessment, and there are options if you've recently gone self-employed.
What if I've been turned down before, or have a health condition?: It may still be possible, sometimes with an exclusion or an adjusted premium. The carrier you apply to makes a difference as well. We've placed coverage for clients with a range of health histories. If you're curious, it's worth a conversation to check before assuming the answer is no.

Let's protect your income

You built your business. Let's make sure an episode of bad health can't undo it.