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 over half (56%) feel their stress level is higher now compared to a year ago, and 44% feel it is harder to be competitive now compared to the start of the recession. However, 72% 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,” says 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.”

While 85% of Canadians carry a debt load of $25,000 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 5% of Canadians at large have more than $50,000 of debt, compared to 21% of self-employed Canadians who have more than $50,000 of debt.

According to the survey, the majority of self-employed Canadians said they own health insurance, like most Canadian employees. However, 54% of respondents said they didn’t have enough disability coverage and 80% 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,” says 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.

The survey was conducted by Ipsos Reid Public Affairs on behalf of DFS 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.

IE