Reviewed By: Pramod Kerkar, MD, FFARCSI

An accident or injury can have a great toll on you. Especially, the financial impacts are almost always devastating. If you are facing financial losses or damages due to the negligence of another person, you have every right to claim for the reimbursement. This would include the losses that you have faced while you were undergoing the treatment or while you were recovering from your injury.

The losses that you include in your compensation are not limited only to the lost wages. It includes all sorts of incomes, even beyond the normal salary. However, these can be categorized into two broad sections –

  1. Lost Wages or Lost Income:

    It is the income that you receive from your employer for the work you do. It is the check or direct deposit coming from your company. The wages or income can be paid weekly, bi-weekly or monthly.

  2. Lost Compensation:

    This is the additional financial benefit, beyond the weekly, bi-weekly or monthly income. It is also the amount of money that you are capable of earning. These would include –

    • Sick leaves
    • Vacation leaves
    • Pay bonuses
    • Bonus days
    • Performance bonus
    • Other perks of employment.

The Right Way to Include Lost Income in Your Settlement Demand

The Right Way to Include Lost Income in Your Settlement Demand

The correct way to estimate and include the lost income in your settlement claim is by calculating all the kinds of income that you would have got had the accident or injury not happened. The things to calculate in that regard includes:

  1. Sick Leaves:

    Every employee has a certain amount of days as sick days or leaves. It can be anything such as 10 or 12 or 14 or more in a year. If you have met with an accident and are injured and have to take the sick leaves from your office in order to recover yourself, you have every right to claim the reimbursement.

  2. Vacation Days:

    If you had to use your vacation days in order to recover from the injuries, then you can include them in the claim.

  3. Bonus Days:

    These are the public holidays or the performance based off days that you earned or could have earned, had you not met with the accident. These too can be included in the compensation.

  4. Pay Bonuses:

    Employees often get different types of bonuses based on their performance. On meeting a sales target or on fulfilling some other benchmark, the employee can be entitled to these bonuses. If you had the chances of getting such bonuses and the injury has eliminated that chance, you can claim that bonus amount to be reimbursed.

  5. Other Perks of Employment:

    These are the non-financial benefits that an employee is liable to get from the company. These include the company outings, work vacations, privileges like a company car or even other luxuries. If you have missed any of these as a result of the injury or accident, then you can add that loss to your compensation.

    In case of the sick leaves or vacation days, the calculation would be based on a per day wage. These are all the different sorts of lost incomes or financial losses that the victim fails to include in the compensation. However, the insurance adjusters do not bother to tell the victims about these. They club the lost wages and lost compensation together. But, if you know all of these individually, it would substantially increase your chances of getting more compensation.

Evidence of Lost Income for Settlement Demand

When you are filing a compensation or reimbursement claim, the first thing that you need to keep in mind is that you must ALWAYS tell the truth. Do not tell lies or do not overestimate with the hope of fleecing the at-fault opposition. The right way to include your lost income in your settlement demand is by providing valid documentation as a proof of your losses and damages. Each and every document will be closely assessed and scrutinized. Any fault will lead the situation against you and you will lose your potential chances of reimbursement.

  1. Doctor's Narrative:

    The first evidence that you need to provide to the court is the doctor's narrative. The doctor must provide a detailed report of the injury, the damages that you have faced physically and the limitations that you will have to compromise with in the near future or for long term. This would include the treatment method and the medicines that you are prescribed.

  2. Progressive Prognosis:

    Along with the doctor's narrative, there must also be a progressive prognosis report for the extent of the injury. It would include – for how long you will have to abstain from work, the type of jobs that you cannot do, how long it will take you to return to your previous job routine completely or the complete recovery time. It should be very detailed and thorough, including how long you are allowed stand at a stretch, how much weight you are allowed to lift etc.

    A vague narrative or prognosis report is never going to help you in claiming the reimbursement or compensation. In fact, it will go against you as the adjuster of the opposition party will use it against you.

  3. Letter from Employer:

    Yet another important proof of your lost income is the letter from your employer. It is the employer, who will have to testify for the amount of wages that you have lost during that period. The employer will also have to mention the bonus amounts that you have lost during that period. This letter must be written on a company letterhead and your Manager must sign it.

Things the Employer Needs to Mention in the Evidence Letter for Settlement Demand

There is a clear set of points that must be mentioned in the letter from the employer. These are –

  • Number of days you have been absent from work
  • Your salary, wages or hourly or daily pay during the time of your injury
  • The usual hours or work period you spend every day or every month
  • The trend of overtime you did the weeks or months before the injury
  • Promotion or increment opportunities that you were being considered for by the company
  • Projects that you have been working on and are now pending for your injury
  • Sick leaves, vacation leaves and bonus days that you used for the recovery from your injury
  • Prizes or other benefits that you were liable to get from the company and now have lost the chances for.
  • These would include the vacations, restaurant vouchers, movie tickets or other amusement or entertainment tickets.

Right Way to Include Lost Income for Self-Employed People

If you are self-employed, you have every right to claim the losses or compensation for the income that you have lost. However, proving the losses is a bit more challenging than those, who are employed to some employers. In that case, you must hire a forensic accountant.

The forensic accountants study and calculate the past income and based on that, determine the potential future income that you have lost due to the injury or accident.

The factors that they take into consideration for this prediction are –

  • Past income
  • Trend of growth rate of business
  • Potential new customers
  • Business trend in the particular area that you are operating in
  • Income level of other similar businesses in that area.

Those, who do not run a complicated business that demands a forensic accountant, can always choose to right the statement for themselves. In that case, you need to provide the tax payment and income statements to the court. In case you have been working on expanding your business and pursuing new customers, you can show that to the claim adjuster or to the court as well. Asking for letters from them, stating that they would have been your customers if you were not injured or not absent during that phase, would be very useful.

Now that you have known about these, it would be easy for you not to forget any of the sections that you can claim a reimbursement for. Otherwise, the option of hiring the professional claim adjusters is always open.

Pramod Kerkar

Written, Edited or Reviewed By:

, MD,FFARCSI

Pain Assist Inc.

Last Modified On: April 23, 2018

This article does not provide medical advice. See disclaimer

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