Can You Recover Lost Income If You Are Self-Employed and Cannot Work After an Accident?

A self-employed person can recover lost income if they cannot work after an accident that was caused by someone’s negligence. Because you don't have a paycheck, you must provide clear proof to show what you would have earned.

Philadelphia is known for heavy traffic, which poses safety challenges for drivers. Excessive speeds, distracted driving, and aggressive driving are the top causes of accidents. If you are injured in a crash caused by another driver’s negligence, Rosenbaum Injury Law offers legal guidance and advocates for accident victims seeking fair compensation. The firm represents injured individuals seeking compensation for their losses, including lost income and reduced earning capacity.

However, the outcome of your compensation will depend on a number of factors. This article will discuss them.

You Need To Prove Income Loss

These documents will help you prove your income:

• Tax returns from the last 2 to 3 years

• Invoices for all work completed just before the accident. Also include contracts or canceled service agreements.

• Bank statements to show direct deposits related to your work.

• Profit and loss statements

• Client emails or letters confirming projects you turned down because of the accident.

• Medical records showing that your injuries stopped you from working.

You Must Establish the Driver’s Negligence 

You need to have strong evidence that the driver was negligent and responsible for the accident. To protect your right to receive compensation, it's important to gather evidence of a negligent driver. Here are a few things that act as critical evidence:

• Dashcam footage

• Witness testimony

• Official police reports

• Photos of the accident scene

• Surveillance video

Under Pennsylvania law, 42 Pa. C.S. § 7102 establishes the state's comparative negligence rule. If you share some responsibility for the accident, you may still recover compensation if your negligence is not greater than the defendant's. However, your compensation may be reduced according to your percentage of fault. This rule can affect the amount you receive for lost income.

How Long Can You Claim Lost Income After an Accident?

You can claim lost income for as long as your injuries prevent you from working, provided you have evidence of your losses. Self-employed individuals may recover income lost during recovery by documenting missed jobs, canceled contracts, or declining revenue.

If injuries permanently limit your ability to work, you may also seek compensation for reduced future earning capacity. Medical records, financial statements, and expert assessments can help demonstrate these losses and support your claim.

Lost Income Can Create Significant Financial Challenges 

It can be devastating when someone else’s negligence forces you to stop working. Being involved in an accident can be a traumatic experience, causing both physical and psychological problems.

The loss of income can be a cause of stress as you are trying to resume normal daily activities. If you can no longer do the same type of work, especially if it's physically demanding, you likely face long-term financial harm.

Lost wages include:

• Performance-based pay you were about to receive.

• Regular income from self-employment. Hourly or weekly pay and fixed contract fees.

• Commission

• Tips from happy and satisfied customers

• Overtime pay. Income lost from overtime shifts.

Calculating Lost Income Requires Reviewing Your Earnings History 

Calculating lost income for salaried people with steady jobs is a straightforward thing. However, for unemployed persons, it can be a little more difficult to accurately do so. 

To do this, you might want to analyze all sources of income to get a clear view of your earnings.

Again, calculating your average income might be difficult for self-employed people. For example, you might get a lot of money this month and very little the next month.

When you partner with Rosenbaum Injury Law, you can get assistance with how to calculate lost income.

Quick Summary

• A self-employed person can recover lost wages after an accident if they can prove the driver was negligent.

• You need to provide receipts and tax invoices to prove loss of income.

• Dashcam footage and fitness statements can help prove the driver was negligent.

• Lost income includes tips, commissions, bonuses, and overtime pay.

• A lawyer can assist you with how to calculate lost income so you can be compensated.