So we're off to LLoyds of London, eh? -Is that rhetorical or are you sure about that? Or is that a rhetorical comment without substantiation? My commercial agent says no such insurance is sold. The closest that would come to such a policy is a policy for disability, which would be due to medical reasons, and W.C. insurance which is payed for by the employer, and would also be a disability due to medical reasons.
Heck they will insure anything, even actors lips and legs.
Can self-employed people claim unemployment? Yes, and no. Mostly no. As Josh King, an attorney and vice-president of Avvo, a site designed to help people find the right lawyer, told me: "Unemployment law differs from state to state, but generally speaking, the self-employed are not eligible for unemployment benefits for a simple reason: They haven't paid into the state's unemployment insurance fund."
If you're self-employed and have an S-Corp, you can collect unemployment, but in that case, your corporation is paying you a salary and putting money into the state unemployment insurance program, says King, adding: "There is no free lunch."
Well, actually, you can have free lunch. You are eligible for benefits like food stamps, says King, adding that it's need-based, "depending on their income. Being self-employed does not disqualify them from these benefits." You're also eligible for Medicaid (health insurance for the unemployed and low-waged) and the WIC program (which provides nutrition and nutritional supplements to women, infants and children up to age five).
If you're self-employed but want to make yourself eligible for unemployment. There are ways to do that like the aforementioned S-Corp, or you can volunteer to pay unemployment taxes, suggests D. Jill Pugh, an employment law attorney in Seattle who also has an employment law blog.
She points out that "unemployment benefit eligibility varies somewhat from state to state," so check with your state first rather than decide this is gospel. "Here in Washington," says Pugh, "a self-employed person could theoretically qualify for unemployment benefits, if they took time to register with the state and had been paying unemployment taxes." However, that doesn't happen often, says Pugh, and adds that there are other eligibility requirements as well.
Options for the self-employed...who feel unemployed