Self-Employed? Here’s How to Claim Lost Wages After an Accident

Car Insurance meeting

Getting into an accident is bad enough. What happens if you’re self-employed and a car accident puts you out of work? There are certain steps you can take to protect yourself.

What Counts As Being Self-Employed?

You are self-employed if you are a freelancer, contractor, or a sole-proprietor. Positions like these are similar since you usually choose your own hours and who you work for.

Independent contractors also fall under the self-employed category. The reason is they typically work the hours they choose. They also get to determine how they complete the work. This is why they count as self-employed.

A sole proprietor is a person who runs their own business. Many refer to them as business owners or entrepreneurs. These people make as much as their marketing and sales bring in.

Types of Compensation

When an accident injures you, you can seek a few types of compensation. Some examples are medical bills, pain and suffering, and lost wages. Self-employed people specifically lose:

  • Income
  • Future earning
  • Business opportunities
  • Goodwill and their reputation
  • Profits

You can also get compensation if you had to hire someone to do tasks your injury made impossible. Another example is if you had to pay employees overtime to cover your absence.

How to Prove Lost Wages?

Proving lost wages for self-employed individuals is more challenging, but it is possible. You need to make sure to provide the insurance company and courts with solid proof, such as:

  • Proof of income through tax documents
  • Business and bank records
  • Profit and loss statements
  • Medical records from injury treatments
  • 1099 from from independent contractor’s employer
  • Work orders and receipts
  • Letters from potential clients

Tax documents are proof of how much you typically earn. You can show how much you earned during the same period last year. Using your 1099 form and tax returns will be key. Business invoices and receipts can also help you prove how much you would normally earn.

Profit and loss statements show the trend a business is growing. It helps to have several of them dating back a few years. This will make it harder to deny your claim.

Business and bank records demonstrate you have a legitimate business structure. Things like DBAs, LLCs, and other articles of organization show a business exists. Licenses and certificates are helpful too.

Medical documents will show how serious your injuries are. They can also count towards the total damages you end up seeking. Doctor’s notes and disability slips are helpful evidence.

Self-employed people sometimes have to go another route. They can ask clients to send letters saying they intended to do business before the injury. Keep any contracts clients may have canceled since this will give an exact amount that was lost. This serves as strong proof of lost business.

Economic loss experts or forensic accountants can also testify for your case. These experts can look at your education and skill level relative to the local market. Then they can estimate how much the injury impacted your income.

An Attorney Can Offer Strategic Help

Some people can put this all together on their own. Others can get confused or overwhelmed by it all. Make sure to stay in touch with your attorney if you hire one.

Cases are made and lost based on the evidence you collect. Many clients end up falling behind and not giving their lawyers all the information they need.

Experienced car accident lawyers will have a network of experts they can rely on. They also understand the process of bringing your case forward.

Final Thoughts

Self-employed people have to leap a few more hurdles to get compensated for lost pay. Make sure to collect all your business, medical records, and tax records. This will make it much easier to prove how much income you lost because of the accident.

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