Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.
Detailed Answer
1. Understanding Lost Self-Employed Income in Ohio
When you suffer an accident due to someone else’s negligence, Ohio law allows you to recover economic losses, including lost self-employed income, as part of your personal injury claim. Under Ohio Revised Code § 2305.31, a victim may seek compensation for past and future lost earnings directly attributable to the injury.
Ohio Rev. Code § 2305.31
2. Identifying Compensable Income
For a self-employed individual, compensable income includes:
- Net profits: Business earnings after deducting expenses, typically shown on IRS Schedule C.
- Lost contracts or opportunities: Income you would have earned from projects or clients canceled because of your injury.
- Reduced earning capacity: Difference between pre-accident and post-accident earning potential.
3. Gathering Essential Documentation
To prove your lost self-employed income, collect the following records:
- Tax returns: Copies of the last 2–3 years of personal and business tax returns (Schedule C).
- Profit & loss statements: Monthly or quarterly P&L statements showing revenue and expenses before and after the accident.
- Bank & credit card statements: Records reflecting business deposits and payments.
- Client invoices & contracts: Documents proving scheduled work and expected fees.
- Business logs: Daily time or mileage logs demonstrating work you missed due to injuries.
4. Calculating Future Lost Earnings
Ohio courts recognize future lost earnings as part of general damages. To estimate future losses:
- Hire a forensic accountant or vocational expert to model income trends.
- Use pre-accident growth rates and industry benchmarks.
- Adjust for business expenses and taxes to arrive at net projections.
5. Presenting Your Claim to Insurers or Court
Begin with a demand package to the at-fault party’s insurer:
- Demand letter: Outline facts, liability, and itemized economic losses.
- Supporting exhibits: Attach tax returns, P&L statements, invoices, and expert reports.
If the insurer denies or undervalues your claim, file a lawsuit before the two-year deadline under Ohio Revised Code § 2305.10.
Ohio Rev. Code § 2305.10
Helpful Hints
- Maintain a detailed daily work log, including hours you planned to work and tasks missed.
- Use accounting software or spreadsheets to track income and expenses in real time.
- Keep all business records and receipts for at least three years after the accident.
- Consult a forensic accountant early to strengthen your lost-profit calculations.
- Document any efforts you make to mitigate losses, such as hiring temporary help.
- Review your policy’s loss-of-income coverage if you have a business insurance plan.