Self Employed Canadians Managing Recession but not Risk

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Self-employed Canadians tend to have more debt and risk to manage than the average Canadian employee, but that is having limited effect on their stress and work levels during this recession, according to a survey conducted by Desjardins Financial Security.

Desjardins research indicates that self-employed Canadians are carrying more personal debt, excluding mortgages on their primary residence, than the average Canadian. Despite their heavier debt loads and the additional risk that it brings, a survey of self-employed Canadians, conducted the first week of March, found that self-employed Canadians remain split on the impact of the recession on their stress levels. Just more than half (56 percent) feel their stress level is higher now compared to a year ago and fewer (44 percent) feel it is harder to be competitive now compared to the start of the recession.

However, 72 percent of self-employed Canadians said they are not working significantly more hours since the start of the recession.

"It is encouraging that Canada's self-employed are getting through the recession, however, the survey results also show that many are not doing enough to mitigate the risks particular to small businesses," said Nathalie Tremblay, Health Products Manager, Individual Insurance, at Desjardins Financial Security. "People who start their own companies often tend to think like an employee with a benefits package, where most of the risk is covered by the company. When you run your own business, you are responsible for everything: your livelihood, employees, creditors, vendors and ultimately your family, so self-employed Canadians need to use different tools to protect their interests."

Risky Business

While 85 percent of Canadians carry a debt load of $25K or less, just over half of self-employed workers claimed their debt was in this bottom category. At the top end of debt levels, only five percent of Canadians at large have more than $50k of debt, compared to 21 percent of self-employed Canadians who have more than $50k of debt.

According to the survey, the majority of self-employed Canadians said they own health insurance, like most Canadian employees. However, fifty-four percent of respondents said they didn't have enough disability coverage and 80 percent said they were not familiar with business expense insurance.

This spring, DFS launched a new suite of insurance products specially designed for self-employed Canadians. The Solo portfolio offers four customized products allowing almost all small business owners to ensure their businesses remain solvent in case of illness, accident or personal injury.

Coverage includes disability income, business expense, living expenses and accident disability income.

"We found that a common misconception among small business owners is about the coverage in case of disability from the spousal group plan. In fact, it is the case for health care expenses not covered under the provincial health program but personal disability cannot be provided by the spousal group plan," said Tremblay. "Small business owners should consider a disability insurance coverage to replace their income in case of disability and business expense insurance to keep businesses solvent in case of unforeseen circumstances." The new Solo suite provides both.

For more information about Desjardins Financial Security's products for small business owners and self-employed Canadians, including disability insurance and business expense insurance, visit: www.dfs.ca/solo.

About the Survey

The Desjardins Financial Security Survey on Self-Employed - Small Business Owners: 2009 edition was conducted by Ipsos Reid Public Affairs on behalf of Desjardins Financial Security between March 3 and 9, 2009. In total, 1,010 interviews were conducted with a representative sample of Canadian adults that are self-employed or owners of a small business. The margin of error on a sample size of 1,010 respondents is +/- 3.1%,19 times out of 20, of what they would have been had the entire population been polled. Data for the Ipsos Reid Online Omnibus are collected through a random sampling of the 241,000+ member national Ipsos Reid online panel.

Both the survey invitation list and the returned data are weighted to reflect the composition of the general Canadian population. Data was also weighted to reflect the self-employed and the small business owners'population. The comparative data about average Canadian employees came from the 2008 DFS retirement and Health is Cool! Surveys.

About Desjardins Financial Security

Desjardins Financial Security, a subsidiary of Desjardins Group, the largest integrated cooperative financial group in Canada, specializes in providing life insurance, health insurance and retirement savings products to individuals and groups. Every day, over five million Canadians rely on Desjardins Financial Security to ensure their financial security. Desjardins Financial Security employs 3,800 people and administers $19.7 billion in assets from offices in several cities across the country, including Vancouver, Calgary, Winnipeg, Toronto, Ottawa, Montreal, Quebec, Levis, Halifax and St. John's. For more information please visit www.dfs.ca.

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