If you’re self-employed, getting injured in a car accident can force you to deal with more than just injuries. If you’re unable to work, it can eliminate your income immediately. Unlike W-2 employees who have an HR department to handle paperwork and workers’ compensation to cover bills, you have to figure everything out on your own. For instance, you need to identify who to hold responsible and how to pursue them for your medical bills and lost wages, all while managing the long-term impact on your business.
Hiring a lawyer is more important than you might think
Proving your losses after an accident isn’t necessarily hard when you’re self-employed, but it isn’t as simple as handing over a couple of pay stubs. Not only will a lawyer help you identify who is at fault (it could be multiple entities), but they’ll also direct you on how to move forward to collect compensation.
With a lawyer, you’ll have an expert negotiator working hard to get you the full value of your claim. Lawyers know exactly what car accident claims are worth, and they know all the games insurers play to minimize payouts. They’ll push back when an offer isn’t fair to make sure you don’t get short-changed. If you don’t have a lawyer, you risk not getting the compensation you deserve.
Who actually pays after a car accident for the self-employed?
Who ends up paying for your accident depends on what happened, your percentage of fault, your insurance coverage, and whether another party was at fault. If another driver caused your accident, their liability insurance is usually the first source of compensation. This can be used to cover medical expenses, lost income, and property damage. If the at-fault driver is uninsured or underinsured, your policy might cover the gap if you have uninsured/underinsured protection.
If you were using your car for business, your personal insurance policy might not apply. Many policies exclude coverage when the vehicle is used for business, which means you could be out of luck if you don’t have commercial auto insurance.
Why self-employed workers don’t have a big safety net
When you have a traditional job, workers’ compensation usually covers all injuries sustained on the job, regardless of fault. When you work for yourself, you have to create your own safety net. The financial risk falls completely on you unless you opt into individual insurance coverage.
If you’re injured in a car crash while working, your ability to recover a settlement outside of a lawsuit depends on the policies you’ve signed up for ahead of time. Many self-employed individuals skip extensive coverage to save money, but that’s risky. At a minimum, self-employed individuals should have short-term and long-term disability insurance and commercial auto insurance if they drive for work.
How lost income is calculated for self-employed injury claims
If your injury will impact your ability to work long-term, you can include future lost income in your claim. However, being self-employed can make it a little more challenging to prove how much money you’ve actually lost and will lose in the future. Unlike a fixed salary, self-employment income requires more work to prove. You’ll need to provide your past tax returns, profit and loss statements, and bank records to establish a baseline for your income.
What happens if you were partially at fault
Not every car accident has one clear at-fault driver. If you share any of the responsibility, it can lower your compensation. Many states follow comparative negligence rules that reduce a claimant’s payout by the percentage they’re found at fault. For example, if you’re 15% at fault, your payout will be reduced by 15%. Some states, like Tennessee, follow a modified comparative fault rule where claimants are barred from recovering any compensation if they’re 50% or more responsible. That’s why insurance companies push so hard to assign fault. They want to pay as little as possible.
Know how to protect yourself
Getting injured in a car accident while you’re working for yourself can create a cascade of frustrating and costly events. Medical bills will pile up, income will disappear, and you’ll be stuck figuring it out on your own. However, hiring a lawyer means getting the legal help you need to recover financially and the peace of mind to recover physically.