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If you run your own business or work as an independent contractor and you cannot work because of an accident, New York law allows you to seek compensation for the earnings you lost. To succeed you must link the injury to lost income and prove the amount of your loss with reliable documentation. Courts and insurers in New York look for contemporaneous, verifiable records that show your normal earnings, the income you actually received after the accident, and the time you were unable to work.

What legal standard applies

Under New York law, damages for personal injury include compensation for pecuniary losses, including loss of earnings and future earnings. See the general measure of damages in Civil Practice Law & Rules § 5001: CPLR § 5001. You must file within the applicable time limit for personal injury claims—typically three years from the date of the accident under CPLR § 214: CPLR § 214.

What counts as recoverable lost earnings for self-employed people

• Net earnings (profit) that you would have received but for the injury, not just gross receipts.
• Wages or payments you actually lost during the recovery period (past lost income).
• Reasonable and provable loss of future earning capacity if the injury has lasting effects.

Types of admissible records and proof

New York law allows business records and ordinary documents to prove income. Business records kept in the regular course of business are generally admissible. See CPLR § 4518 on business records and admissibility: CPLR § 4518. Useful evidence includes:

• Federal and state tax returns (past 2–3 years, often more for future baseline).
• 1099-NEC/1099-MISC forms and K-1s where applicable.
• Profit & loss statements and ledgers prepared in the ordinary course of business.
• Bank and merchant statements showing deposits and payments tied to the business.
• Client invoices, contracts, purchase orders, and cancelled checks demonstrating scheduled work and revenue.
• Appointment calendars, project schedules, and email or text communications confirming lost jobs or cancelled bookings caused by the injury.
• Receipts for expenses you incurred to mitigate the loss (e.g., hiring substitute labor).
• Medical records and treating-provider notes that establish the period you were unable to perform your work duties and any work restrictions.

How to show the amount lost

Courts and insurers expect a clear method for calculating lost earnings:

1. Establish a pre-accident baseline. Use prior tax returns, average monthly or weekly deposits, or historical profit-and-loss statements to show typical earnings before the accident.
2. Show actual post-accident receipts. Produce bank records, invoices, and cancelled contracts to show what you earned after the accident.
3. Compute lost net income. Subtract ordinary business expenses to show lost net profit (not just reduced gross revenue). If you previously paid yourself a salary, document how you calculated the lost personal income.
4. Document the time out of work. Use medical notes, return-to-work authorizations, and your business records to prove the specific period you could not work or had diminished capacity.
5. If claiming future losses, show a reasonable projection. Use your historical earnings pattern and business prospects, supported by analysis from a financial professional, vocational evaluator, or accountant to quantify future losses. Explain assumptions and any discounting to present value.

When contemporaneous records are missing

If you did not keep ideal records, you can still reconstruct lost earnings, but courts and insurers require a careful, documented reconstruction:

• Use tax returns along with bank deposits to infer revenue and adjust for known business expenses.
• Collect client affidavits or declarations confirming lost work or cancelled contracts.
• Produce copies of emails, bids, schedules, or advertising that show your business volume before the injury.
• Keep a detailed, contemporaneous diary from the accident forward describing missed work and efforts to obtain replacement work.

Professional assistance and valuation

For complex claims, a financial analyst, accountant, or vocational evaluator commonly prepares a written analysis that documents how lost earnings were calculated. Courts accept those reports when they transparently show sources, methods, and assumptions. Be sure any report includes references to the underlying documents (tax returns, bank records, invoices) so the calculations are verifiable.

Common mistakes to avoid

• Claiming gross sales instead of net profit. Damages typically track lost net earnings.
• Failing to subtract business expenses you would have incurred anyway.
• Relying solely on memory or vague statements without records or corroboration.
• Missing the statute of limitations. Most negligence claims must be filed within three years—see CPLR § 214.

Practical next steps

1. Gather your last 3–5 years of tax returns, recent profit & loss statements, bank and merchant account statements, invoices, and client contracts.
2. Get copies of your medical records and treating-provider notes showing work restrictions and recovery dates.
3. Prepare a written timeline showing dates and descriptions of lost jobs, cancelled appointments, or delayed projects.
4. Consider hiring a qualified financial analyst, accountant, or vocational evaluator to prepare a written income-loss analysis tied to your records.
5. Preserve all evidence and do not throw away business records created around the time of the accident.

Special situations

If the accident occurred while you were performing work for an employer or in the scope of employment, you may have workers’ compensation remedies that limit or alter a lawsuit for negligence. For more information on New York workers’ compensation, see the New York State Workers’ Compensation website: wcb.ny.gov.