WSIB vs. Disability Insurance: Is WSIB Enough If You’re Self-Employed?
If you’re self-employed in Ontario, understanding WSIB vs disability insurance can help you see how much of your income is actually protected if you’re unable to work.. WSIB may provide important protection for some workers, but it isn’t the same as personally owned disability insurance. Understanding the difference can help you determine where you may have a gap in your income protection.
WSIB vs Disability Insurance: What Does Each Actually Cover?
One of the biggest differences is what caused you to become unable to work. WSIB generally focuses on injuries and illnesses connected to your employment or workplace.
Personal disability insurance can provide coverage for a qualifying disability caused by an illness or injury, subject to the definitions, exclusions, waiting period and other terms of the individual policy.
That distinction matters because many disabilities that prevent someone from earning an income may have nothing to do with an accident at work.
WSIB provides workplace insurance coverage for eligible Ontario workers and businesses. Depending on the circumstances, benefits may include income replacement when a work-related injury or illness prevents you from working, as well as health-care and return-to-work support.
The important distinction is that WSIB is designed around work-related injuries and illnesses. Personal disability insurance is designed differently and can provide income protection when a qualifying disability prevents you from working, whether the cause is an illness or an injury, subject to the terms of the policy.
The Biggest Difference: What Causes the Disability?
What About Income Replacement?
WSIB and personal disability insurance approach income replacement differently. WSIB benefits are tied to the rules and calculations of the workplace insurance system, while an individual disability insurance policy is designed around the amount of monthly benefit you qualify for when the policy is issued.
For someone who is self-employed, this distinction can be especially important. Your personal income, business revenue and the amount of money you actually need each month may be very different numbers.
What Happens If You’re Injured Outside of Work?
This is one of the most important differences to understand. A disability doesn’t have to happen while you’re working to affect your ability to earn an income. An illness, an injury at home, a recreational accident or another qualifying medical condition could potentially keep you from working.
Personal disability insurance can provide coverage for qualifying disabilities that occur both on and off the job, subject to the definitions, exclusions and other terms of the individual policy.
So, Is WSIB Enough If You’re Self-Employed?
There isn’t one answer that applies to every self-employed person. WSIB may provide valuable protection for eligible work-related injuries and illnesses, but it may not address every situation that could prevent you from earning an income.
The better question is whether the protection you currently have would provide enough income — and cover the right circumstances — if you were unable to work for several months or longer.
For many self-employed people, WSIB and personal disability insurance aren’t necessarily an either-or decision. They can serve different purposes within an overall income-protection strategy.
Not Sure How Much Income Protection You Actually Have?
If you’re self-employed, it can be difficult to know how much of your income is actually protected — or what would happen financially if you couldn’t work.
Blue Harbour Financial can help you review your existing protection, identify potential gaps, and compare disability insurance options from multiple Canadian insurers.