Insurance When Leaving Your Job to Start a Business | Go-Getter Advisors
You have made the decision. You are leaving your job, stepping out on your own, and building something that is actually yours. It is one of the most exciting and terrifying things a woman can do — and in the middle of all the excitement, insurance is probably the last thing on your mind. But here is the reality: the day you leave your employer, you lose a safety net you probably did not even know you were standing on. Health insurance, disability coverage, life insurance, liability protection — many of these were quietly handled by your employer, and now they are your responsibility. This is not a reason to stay. It is a reason to plan.
What You Are Losing When You Leave
Before you can build your new protection strategy, you need to understand what disappears when you hand in your resignation.
Employer-sponsored health insurance ends on your last day of employment (or the last day of the month, depending on your employer’s policy). This is the most immediate and urgent coverage gap to address.
Group disability insurance — the short-term and long-term disability coverage your employer provided — ends with your employment. If you get sick or injured and cannot work, there is no longer a group policy paying a portion of your income.
Group life insurance — if your employer provided life insurance as a benefit, that coverage ends too.
Workers’ compensation — as a business owner, you are no longer covered by workers’ comp. If you hire employees, you will need to provide it for them.
Errors and omissions / professional liability — if your employer carried professional liability insurance that covered your work, you are now personally responsible for your own coverage.
The Order of Operations
When you are launching a business, you are managing a hundred things at once. Here is the priority order for getting your insurance in place:
First: Health Insurance (within 30‒60 days of leaving) Losing employer-sponsored health insurance is a qualifying life event that opens a Special Enrollment Period for marketplace plans. You have 60 days from your last day of coverage to enroll. Do not miss this window — if you do, you will have to wait until open enrollment. Options include: COBRA (continues your current coverage but is expensive), marketplace plans through healthcare.gov, a spouse or partner’s employer plan if available, or a health sharing plan if you are exploring alternatives.
Second: Business Liability Insurance (before you take your first client) The moment you accept a client and begin providing services, you have professional liability exposure. General liability and professional liability insurance should be in place before you sign your first client contract — not after. Many client contracts require proof of insurance before work begins. Getting your coverage in place early means you are never in the position of having to delay a client engagement because you do not have a Certificate of Insurance ready.
Third: Disability / Income Protection (within your first 90 days) This is the coverage most new business owners skip — and the one that can be most financially devastating to go without. As a self-employed person, if you get sick or injured and cannot work, there is no paycheck coming in. A disability income policy replaces a portion of your income during that period. The earlier you apply, the better. Disability insurance is medically underwritten, meaning your health at the time of application affects your eligibility and premium. Waiting until you have a health issue means you may not qualify.
Fourth: Life Insurance (if you have dependents) If people depend on your income — a spouse, children, aging parents — life insurance is not optional. If you had group life insurance through your employer, replacing it with an individual policy should happen within your first year of business.
What Is New: Business-Specific Coverage
Beyond replacing what you lost, launching a business creates new coverage needs that you did not have as an employee.
Professional Liability / E&O Insurance — covers claims that your professional services or advice caused a client financial harm. This is your primary business risk as a service-based professional.
General Liability Insurance — covers third-party bodily injury and property damage. Required by most commercial leases and client contracts.
Cyber Liability Insurance — if you store client data, use email for sensitive communications, or accept online payments, cyber liability covers you in the event of a data breach or cyberattack.
The Bottom Line
Leaving your job to start a business is one of the most courageous financial decisions you can make. The insurance transition is manageable — it just requires a plan and a timeline. You do not have to figure this out alone.
Book a free clarity call with Go-Getter Advisors. We will walk through your business structure, your risks, and your options — no pressure, no jargon, just a real conversation.
Go-Getter Advisors is an independent insurance advisory firm serving women entrepreneurs across Utah, Arizona, and Nevada. Licensed in UT, AZ, and NV.
