5 Key Reasons Why Small Business Owners Buy Disability Insurance

By: Updated: July 28, 2016


A disability can happen to small business owners at anytime and anyplace - not just at work.

A fall off a ladder at home after work or on the weekend. A car accident while driving to work or on vacation. A heart attack that you’re recovering from and your doctor says you have to take it easy and slow down.

When running a small business there's a lot at stake and smart business owners take the steps necessary to protect themselves.

Many small business owners are diligent in purchasing life insurance to protect their families in the event of their early death, but only some wisely consider disability insurance.

The fact is that people under 50 are more likely to become disabled than die; in fact, almost 35% will suffer a long term illness or disability lasting longer than 3 months.

Here are 5 key reasons why small business owners buy disability insurance.

1. They Have Debt Obligations

If you have a mortgage, car payment or student debt obligation, what would happen if you lost your income source temporarily? The biggest concern for most people is a mortgage payment in this scenario. Disability insurance may be the only thing protecting you from delinquency, or even foreclosure, if you are unable to work due to illness or injury.

Did you know that 50% of mortgage foreclosures in Canada are due to a breadwinner's disability?

2. They Have a Family

What would your family do if your income was no longer reliable? Head of household individuals are the most common purchasers of disability insurance for this reason. If you have more than one person relying on your salary, you have to think about a scenario where that salary was no longer applicable, and whether the members of your family could continue the same quality of life, in the case of your disability.

Related Reading: How to Find a Reputable Disability Insurance Advisor in Canada

3. They Do Not Have Emergency Funds

For many people, short-term disability is not a large threat. They could provide for themselves and their families for three months or longer in the face of a loss of income. However, if you do not have an emergency fund, you should consider disability insurance a necessity instead of a luxury. You could face immediate financial crisis if you were unable to perform your work for an extended period of time. 

4. They Work in a Risky or Stressful Profession

All individuals face the risk of becoming disabled; accidents happen, even in the safest of places. However, those people in risky or stressful professions face a much higher incidence of disability than those in safer professions. For example, if you are a doctor, you may become disabled or ill due to stress and strain on your body and not just because of an accident.

5. They Have a Predisposed Condition

You may know that your mother or father became disabled because of a stroke, arthritis or other condition that may have been genetically transferred to you. In this case, you have a greater risk of needing disability insurance. Your insurance may be slightly more costly as a result, but you should consider the alternative to carrying this insurance. If you know for sure that there is a relatively high chance you will become disabled and unable to work, buying insurance is the best method to secure your future regardless of what occurs with your health.


Smart business owners know that their earning potential is their most valuable asset and they need to protect it. Accidents and illness can happen at any time.

How devastating would it be for small business owners who have worked for years to lose everything because they were not properly covered?

Experienced business owners make certain to insure their capacity to make an income; otherwise they may face the serious, life-changing consequences of not having it.

Related reading: The 73 Most Important Disability Insurance Terms

Interested in learning more about Disability Insurance and how it can protect you and your family? Download our free ebook: The Beginner's Guide to Disability Insurance.

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