How Being Self-Employed Can Affect Your Personal Injury Claim

By John Pearson

Being involved in an accident that leads to an injury is a stressful experience, but it becomes even more complicated and adds more stress when it was caused by the negligence of another person or entity. If this has happened to you and you’re looking to file a personal injury claim, there is an extra level of added complications when you’re self-employed.

When you’re injured and unable to go to work, recovering lost wages as part of a personal injury claim is a lot more straight forward than if you’re self-employed. Sole proprietors may have fluctuating incomes or an income that is based on more than just their own efforts, so it can be tricky to receive a fair settlement claim.

What kind of compensation can you get?

Your personal injury lawyer can help you with a claim in the event someone else’s negligence caused your injury. If this is the case for you, you are entitled to compensation for any medical expenses, pain, and suffering you have endured, and lost wages. As someone who is self-employed, your lost wages can include any direct lost income and loss of future earning capacity. You can also claim for lost business opportunities if you’ve been unable to go out and secure clients, as well as lost goodwill or damage to your professional reputation in the event you have had to turn clients away or failed to meet any delivery deadlines. Lastly, you can claim lost profits that no can no longer be invested back into your business.

Additionally, if you were forced to hire another person to cover for your business while you were recovering, those wages can be included in your compensation request. The same principle applies for any overtime pay for employees you have that need to work overtime in order to take on additional duties to cover for you in your absence.

What kind of documentation do you need?

Your personal injury claim will rely on the documentation you provide, so it’s absolutely vital that you keep all your paperwork in order so you can back up your compensation request. The list of supporting documents your lawyer might request from you can include your income tax returns, invoices, bank statements, ledgers, work orders, payroll records, profit and loss statements, deposit information for credit and cash sales, and forms 1099-MISC used to report miscellaneous income.

These documents will most likely be fairly easy to provide to your lawyer if you’ve been self-employed for a few years, but if you’re newly self-employed, or if your income has changed dramatically over the last little while, you may need to come up with other ways to provide the right proof. Sometimes attorneys will advise those who are self-employed to submit letters from clients, for example. Another out-of-the-box solution is to have an economic loss expert assess your earning potential given your past experience, education and based on the local market, and have them testify on your behalf. This can help support your claim for damages and lost wages.

Even if it may seem like a complicated and daunting process, with the help of an experienced personal injury lawyer, it’s always worth chasing any financial compensation that you are owed.

John Pearson is a serial entrepreneur and writer who is passionate about helping small businesses launch and grow. His work has been featured in Huffington Post, Entrepreneur, and Forbes.

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