Disclaimer: This article is for general information only and does not constitute legal advice. Consult a qualified attorney for guidance specific to your situation.
Detailed Answer
When a self-employed person in Nebraska suffers an accident due to another party’s negligence, they may recover compensation for lost business income as part of economic damages under Neb. Rev. Stat. § 25-21,185 (link).
1. Understand Economic Damages
Economic damages include objectively measurable losses such as medical bills, property repair, and lost earnings. For the self-employed, “lost earnings” means net profits you would have earned absent the accident.
2. Gather Detailed Income Records
Compile documentation that shows your normal income pattern. Key records include:
- Federal tax returns (Form 1040 and Schedule C) for the past 2–3 years
- Year-to-date profit and loss statements
- Bank and credit card statements showing deposits and expenditures
- Invoices, contracts, and billing ledgers
3. Maintain a Contemporaneous Income Log
Keep a daily or weekly journal of tasks you performed and hours you would have worked. Note the rate you charge. This log helps bridge gaps in your formal records.
4. Obtain Expert Analysis
Hire a certified public accountant or forensic accountant to prepare a detailed lost-income report. They can reconcile your records and estimate net profits you lost during recovery.
5. Prepare and Submit Your Claim
When you demand compensation (to the insurer or opposing party), include:
- A cover letter summarizing your losses
- All income records and the expert’s report
- Copies of medical records showing your injury and recovery timeline
6. Track Deadlines
In Nebraska, most personal injury claims must be filed within four years of the accident under Neb. Rev. Stat. § 25-207 (link). Missing this deadline can bar your right to recover lost income.
Helpful Hints
- Start record-keeping immediately after the accident.
- Use accounting software to track income and expenses automatically.
- Distinguish between gross revenue and net profit for accurate loss calculation.
- Retain copies of all electronic records and back them up securely.
- Request written confirmation of all communications with insurers.
- Consider a tax professional’s input when interpreting your Schedule C.
- Review your carrier’s policy limits before submitting your demand.
- Consult an attorney if the insurer disputes your documentation or offers a low settlement.