Detailed Answer
If you run your own business or work as an independent contractor and an injury prevents you from earning, you will need to assemble clear, credible proof of lost income to recover compensation. In Nebraska civil claims, judges and juries decide damages based on the evidence you present. Self-employed plaintiffs must translate business records and income evidence into a reliable picture of what they actually lost because of the accident.
What kind of loss can be claimed
There are two common ways a self-employed person claims earnings loss:
- Lost earnings (wages) for hours or days you actually would have worked but could not because of the injury.
- Lost profits or lost business opportunities when your injury reduced your business’s revenue or caused you to lose contracts.
Which category applies depends on your business structure and how you normally pay yourself. Courts often look to your net profits (after ordinary business expenses) as the equivalent of wages for an owner-operator, but you can also prove loss to gross receipts if you show the proper business expenses.
Core types of evidence Nebraska courts accept
Collect multiple kinds of contemporaneous records. The Nebraska evidence code allows business records and regularly kept documents to be admitted under the business-records hearsay exception when properly authenticated. See Neb. Rev. Stat. § 27-803 for how courts treat such records: Neb. Rev. Stat. § 27-803.
Useful documentation includes:
- Tax returns (Schedule C, K-1s, Forms 1099) for several prior years to show normal earnings and seasonality.
- Profit & loss statements, balance sheets, bank statements, and business accounting ledgers.
- Invoices, contracts, signed estimates, purchase orders, and canceled checks showing jobs you performed or would have performed.
- Accounting software reports (QuickBooks, FreshBooks exports) showing revenue and expenses.
- Client communications (emails, texts, proposals) proving existing contracts or reasonably certain future work you lost because of the injury.
- Contemporaneous time logs, calendars, or diaries documenting hours you could not work.
- Medical records and doctor’s notes linking your injury to your inability to work; these establish causation between the injury and lost earnings.
- Affidavits or declarations from clients, vendors, or subcontractors confirming cancellations or lost engagements.
- Expert testimony (accountant, vocational expert, economist) to translate business records into a lost-income calculation acceptable to the court.
How to prove the amount
Courts want a reliable method, not guesswork. Common approaches:
- Multi-year average: Use 2–5 years of prior tax returns or P&L statements to calculate an average monthly or weekly earning, adjusting for seasonality.
- Pipeline and contracts: Show fixed contracts, signed estimates, and client deposits for work you had scheduled and could not complete.
- Net profit approach: If you normally pay yourself from profits, present net profit figures (profit after ordinary and necessary business expenses) as the best measure of lost personal income.
- Gross revenue with expense proof: If you claim lost gross receipts, separately document the expenses that would have been deducted so the court can determine lost net earnings.
- Expert analysis: An accountant or economist can reconstruct income when records are incomplete (using industry standards, bank deposits, and invoices) and present a conservative, court-ready lost-income model.
Proving causation and mitigation
You must connect the injury to the income loss and show you took reasonable steps to reduce your losses:
- Provide medical proof showing you were unable to perform your normal work tasks for the claimed period.
- Document efforts to find alternative work, delegate tasks, or hire substitutes to limit the business harm.
- Show when you returned to work and any continuing limitations that reduced your capacity.
Practical steps after an accident
- Preserve all business records and digital files immediately. Make backups of accounting files and store emails and text messages about jobs and cancellations.
- Track hours and missed appointments from the date of injury forward. Keep a contemporaneous calendar entry or a daily log describing how the injury affected work.
- Request and save medical records and doctor’s notes specifically describing your work restrictions.
- If applicable, ask clients for written statements confirming cancellations or lost projects caused by your injury.
- Consider hiring an accountant to compile and summarize lost-income figures and prepare exhibits that a judge or jury can understand.
How cases typically resolve
Insurance adjusters and defense lawyers expect concrete proof. Settlements often follow when you present organized documentation showing lost income, medical causation, and mitigation. If you file suit, expert testimony increases the likelihood a court will accept reconstructed earnings evidence.
Special note on small claims and quick claims: If the amount is modest, small-claims procedures may limit discovery and the complexity of expert proof. For larger or complicated lost-profit claims, formal litigation with discovery and expert reports is common.
When to get a lawyer
If lost income is significant, records are incomplete, or the other side disputes causation or the amount, consult a Nebraska attorney familiar with personal injury and business valuation. An attorney can help preserve evidence, collect records through discovery or subpoena, and coordinate expert witnesses.
Disclaimer: This article provides general information about Nebraska law and is not legal advice. For advice specific to your situation, consult a licensed Nebraska attorney.
Helpful Hints
- Start collecting records on day one: bank statements, invoices, contracts, and receipts.
- Keep a daily work-impact diary describing tasks you could not perform and the time lost.
- Use tax returns (Schedule C, K-1, Forms 1099) for at least 2–3 prior years to show typical income and seasonality.
- Ask clients to confirm canceled jobs in writing; contemporaneous client statements are very persuasive.
- Save any digital proof of lost opportunities: emails, texts, online contracts, and proposals.
- Hire an accountant early if records are messy—reconstruction is easier if done close to the loss date.
- Document mitigation: notes about alternative work you sought, subcontractors you hired, or tasks you delegated.
- Know the business-records rule in Nebraska. Properly authenticated records (bank statements, ledgers, invoices) are admissible under Neb. Rev. Stat. § 27-803: https://nebraskalegislature.gov/laws/statutes.php?statute=27-803.
- Keep your story consistent: inconsistencies between tax returns, invoices, and testimony weaken proof of lost earnings.