Insurance for Independent Music Instructors

As a natural born worry-wart, I am sometimes perversely interested in really boring topics.  But today’s riveting topic is essential even for non-worrier self-employed music instructors:



[Trumpet fanfare]
Are you protected?
Are you protected?

Why buy insurance? To protect you from the unexpected, like:

  • Your studio gets burglarized or vandalized.
  • Someone slips on the unshoveled walk outside your studio and breaks their leg.
  • You develop an illness and can’t work.
  • Your employee teacher has a work-related injury.
  • You die and your family loses your income.

I’m a right little ray of sunshine, I know.  But seriously, $#*! happens, and protecting yourself is important.

I recommend you consult a professional as you shop for insurance. Comparing the relative merits of different policies is quite tricky, and requires a more detailed knowledge of the field than than the average person’s.

Here are most important types of insurance to consider for self-employed business people like us

Liability coverage:

Someone slips on your unshoveled sidewalk, breaks their hip, and wants to sue you… enter Liability Coverage!

If you work from home, an umbrella clause on your homeowners policy may cover it, though you might want an additional home-based business rider.  Mine only cost an additional $26/year, and it gives me more coverage for equipment and electronics.

If you have retail space, you probably need a business policy  that includes liability– check with your landlord about what their insurance covers.

Renters in an established studio – check on the owner’s liability and property coverage, you may need your own!

Property coverage:

Your cat pukes inside your piano, you’re burglarized, or your house/studio burns down. Here’s where Property coverage helps you–it’s usually included as part of a homeowners or business policy.

If you work from home and have a homeowners policy, you’re typically covered, though you may want to add an additional rider or two – be sure that business assets are listed in the policy! (instruments, equipment?)

If you rent space, include all our instruments and other relevant property in your business policy.

If you keep any kind of inventory on site to sell, there will be a separate rider/policy for that!

Workers Compensation:

You employ a music teacher and he gets hurt on the job. It’s your responsibility to pay for treatment and lost income.

If you’re going to hire employees, you’ll need this no matter what!

Worker’s Comp insurance is not required for your independent contractor teachers, but be careful! The IRS has tightened the definitions of Employee vs. Contractor in recent years.  Ask your accountant if you aren’t sure.

Life Insurance:

What would happen if you died? Do you have children or a spouse who depends on your income?

Now we’re into the personal arena. Life Insurance pays out if you die, and sometimes will pay early if you’re diagnosed with a terminal illness. Life insurance is important, especially if you have a spouse, children, or other dependents.  Consult a professional financial advisor before purchasing life insurance.

Disability Insurance:

You get into a serious car accident and can’t work for 12 weeks while you recover. How do you pay your bills?

Disability insurance replaces part of your income if you are injured and unable to work.  A good disability policy will also replace part of your income if you’re only partially disabled and you can still work a little. You need to show several years of steady income before you can get it, and it will typically only replace up to 60% of income. Again, consult a professional financial advisor before purchasing disability insurance.

Most of the music teachers I know don’t have disability insurance, and feel like they can’t afford it. But consider this – Your greatest asset is your ability to earn an income. What would happen if you couldn’t work?

Health Insurance:

This is the final note because it’s really a no-brainer.   You are required by law to have health insurance, or to pay a penalty to the government. In my humble opinion, everyone needs health insurance no matter what–trust me, someday you will use it!

Here’s the good news: the Affordable Care Act, aka Obamacare, has improved your health insurance options as a person in business for yourself, especially if you have any pre-existing health conditions.

Do you have insurance?  For what?  Do you think you have enough? How do you know?

Up next week: Studio Management tools

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