Self-Employment and Personal Injury CasesRecovery for lost wages can be a significant portion of any serious personal injury claim. However, receiving a fair settlement becomes more complicated when you are self-employed and your income fluctuates or is based on more than your own efforts. 

Understanding Self-Employment

Someone who is self-employed works for himself instead of being an employee of another business. The self-employed are typically either owners of unincorporated small businesses or work as independent contractors.

Self-employment encompasses a wide range of professions and industries. Salespeople, real estate agents, writers, artists, musicians, accountants, mechanics, doctors, and software developers are just a few of the many different types of self-employed people you will find working across the United States. People who are contractors in the gig economy working for services such as Uber or Fiverr are also considered self-employed, even if they only work through one service provider.

Types of Compensation

In a personal injury claim for injuries that are the result of another party's negligence, you are entitled to compensation for medical expenses, pain and suffering, and lost wages. As a self-employed person, your lost wages include:

  • Lost income
  • Loss of future earning capacity
  • Lost business opportunities
  • Lost goodwill or damage to your professional reputation
  • Lost profits that can no longer be invested back into your business

If you were forced to hire someone to provide essential business services while you were recovering from your injuries, this person's wages could be included in your request for compensation. If applicable, overtime pay for existing employees who were required to take on additional duties in your absence can also be included.

Documentation Needed

Documentation is absolutely vital to proving how much income your business generates. Supporting documents your attorney might ask for include:

  • Income tax returns
  • Bank statements
  • Invoices
  • Ledgers
  • Work orders
  • Profit and loss statements
  • Forms 1099-MISC
  • Deposit information for cash and credit sales
  • Payroll records

If you have been self-employed for several years, these documents will probably be fairly easy to provide. However, if you are newly self-employed or your income has recently changed dramatically, you may need to think outside the box to provide the appropriate proof. For example, attorneys sometimes recommend submitting letters from clients you have been working with or those who have agreed to have you perform work in the future.  This avenue may be necessary if you have no other way to prove what your normal income.

Having an economic loss expert testify on your behalf is another way to support your claim for damages. An economic loss expert can assess your earning potential given your education, past experience, and the local market for your services. He can also help to provide insight into how your injuries will affect your ability to support yourself in the future.

How an Attorney Can Help

Due to the challenges associated with accurately estimating self-employment income, having an attorney to advocate for your needs throughout the settlement process is in your best interests. Your attorney will be able to assess the value of your case, help you properly document your income, and negotiate with the insurance company on your behalf.

It is a common misconception that legal representation is unaffordable when you do not have a steady income, but personal injury attorneys accept cases on a contingency fee basis. This means you owe no money upfront and will pay a percentage of your settlement to your attorney as the fee for representation. With this arrangement, you can rest easy knowing that your attorney is committed to helping you protect your right to compensation.

The attorneys at Inland Empire Law Group are dedicated to helping California residents receive the personal injury compensation they need to move forward with their lives. Call today to schedule a free, no-obligation consultation at our Rancho Cucamonga or Victorville offices.


David Ricks
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Rancho Cucamonga Personal Injury Lawyer Serving the Inland Empire Community