Determine Wages Lost After an Accident When Self-Employed

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It Is Not Complicated

How do you determine the lost wages if you are self employed and have not been able to work? It is more complicated than if you have to stay home from a job from a company after sustaining an injury, but there are people who are prepared to help. This article will help to explore options available. If you understand the help available and the necessary process to go through, it is not complicated.

A Forensic Economist Will Help You

If you are self employed, whether you own your own business or do freelance work, and want to document the lost wages sustained from an injury, a forensic economist can help. Such an expert works as a specialist and helps determine economic losses. He will help to determine what your damages are.

Your damages will include loss of income, how much earning capacity you had before the injury, business opportunities which may have been lost, and the good will you may have lost among customers. You will also learn how to mitigate losses through such means as having someone else do your work for you while you are unable to do it yourself. You will need to mitigate damages if you are going to be involved in any kind of legal action as a result of the injuries.

Finding a forensic economist may not be easy, as there are not too many of them. If you do an Internet search for forensic economists seeking work, you may not find any. In that case, speak to the business accountant for the company. He or she may be able to do the same as a forensic economist, or may refer you to one.

Be Prepared

If you are self employed and have not been able to work for awhile because of an injury, be prepared. Have copies of your tax returns to determine how much money may have been lost because of the injury. You will also need financial statements for the current year. One problem is that past years do not offer positive proof of how much money you could have made this year if you had not been injured. They can show trends, however. Also visit the doctor. Get an opinion of how long you will be unable to work and obtain a letter from him, which you might be able to use as proof.

You will also need letters from prospective clients. These will not prove you could have gotten any work from them, but they will be helpful. Based on past experience, you should have an idea whether some or all of the prospective clients would have been actual clients and how much you would have charged them.

Reviewing tax returns, financial statements, and the letters will not prove how much money you could have made, but they can show trends. They may not offer conclusive proof in court, but they will be helpful.

Worker’s Compensation for the Self Employed?

As a self employed person you are not required to have worker’s compensation insurance. However, a self-employed worker can purchase worker’s compensation insurance, called a personal policy insurance.

If you had this insurance and then suffered an injury as a self employed person, documentation of lost earnings is required. The insurance company will not take your word for it–especially because you don’t have pay stubs to show, as a person working in a company would have. To obtain such insurance, one must be listed as the sole proprietor on the policy.

Some Scenarios

Suppose you had been working for one client for six months and made $2,000 a month from that client. You were going to work for that client indefinitely, with no foreseeable drop or increase in your income. You were trying to obtain the same type of work from several other companies. You were almost at the point of getting six months work from another client for $1,000 a month. You had appointments with other clients as well.

After sustaining an injury, you will be unable to work for two months. You could reasonably tell the court or your insurance agent about the potential loss of $4,000 in income from the client paying you $2,000 a month. If injured, you could not meet with the client who would have paid you $1,000 a month, so that much additional income for at least two months is also lost. It could be potentially longer if the company hired somebody else permanently–causing you the loss of goodwill with that company. Also, the ability to market your work to other potential clients is lost. Consider these things and past trends when estimating lost income and be sure to have documents to show an insurance agent or the court.


In conclusion, when self-employed, determining lost in wages due to an injury and documenting the lost wages is not as easy as it would be for a traditional worker. As you can see, however, reviewing your work history can make it much simpler. A forensics economist or your accountant may be able to help as well.