(Taken from a mini-workshop presented by Attorney Sally Hestad to Wisconsin Women Entrepreneurs on 2/1/13)
In my work as a personal injury attorney, I deal with people who have been hurt in accidents, mostly car accidents. So we will be thinking about a car accident and the consequences of the accident for the next few minutes. Hopefully you will then feel more prepared if this ever happens to you!
Imagine an entrepreneur named Susie. She started her sales business several years ago. Susie sells a line of nutrition products called Yummy Stuff and also gives other women the opportunity to join her team and start their own businesses selling Yummy Stuff, and Susie gets a percentage of the sales of the team members she brought in. Things are clicking along for Susie. She is making a good income from her own sales and from sales of her growing team, currently at 6 members. She has a full calendar of appointments and networking events in the next few weeks along with team meetings. It’s 10:30 AM on a Wednesday and Susie is on the road to meet a potential client on the other side of town. Susie has products and samples in the trunk of her car.
Susie is driving her insured Honda Accord on a two lane highway, seat belt on (of course), driving the speed limit when a Toyota Camry in the on-coming lane crosses the center line and crashes head on into Susie’s Honda and then a second later Susie’s car is hit from behind by a pickup driving behind her in her lane. Susie’s airbags deploy filling the air with white powder.
Susie and the contents of her vehicle are forcefully whipped forward and back by the two impacts. Susie says to herself “What just happened?” Her lap top flies off the seat, her Starbucks coffee sprays all over the car, even her glasses are thrown off her face! The products in the trunk are slammed around and damaged.
Susie is overwhelmed by pain and shock. Her neck hurts! Her vehicle is wrecked!
Her business will suffer from this accident!
Because Susie understands the insurance claims process, she will do everything to preserve her safety and to collect information for the claim. So these hints go for Susie and for anyone in a similar situation: This assumes the person who was in the accident is able to move around. These are the things that a personal injury attorney would like to have happen, but of course an injured person may or may not be able to accomplish them.
1) Call 911.
2) If on a busy road, get out of the car—get out of the way of danger.
3) If at all possible find your purse, glasses, computer, phone and insurance card and bring these items with you when you exit the vehicle.
4) Get information on the other drivers and witnesses so you can call them later.
5) Take photos or videos with your cell phone camera. Photograph your car damage, the deployed airbags the other cars’ damage and the accident scene. If possible, open the trunk and photograph anything damaged inside.
6) Ask the police to for an exchange of information report. This something the police can generate at the scene—a brief accident report which names the parties and their insurance companies.
7) The disabled vehicle is likely to be towed away. Find out where it is going and have someone contact the tow yard to secure possessions still in the vehicle. Sometimes things disappear from the storage lot.
8) Take the ambulance or have someone drive you to the hospital or Urgent Care if you have pain.
9) When you get to a quiet place, make notes about everything you remember about how the accident happened and what the people involved said, and your symptoms. Keep on journaling as time goes by.
Write down the date, time and name of everyone you talk to, and make a summary of each conversation. Especially note the insurance adjusters, claim numbers and their phone numbers.
10) After an accident, if you have whiplash, muscle aches and pains, headaches, difficulty sleeping, and multiple appointments to see the doctor, get x-rays, and go to PT, you are going to be exhausted. If your car is totaled you are going to have to go car shopping, something you were not planning on doing!! All of this will impact your business.
Getting back to Susie’s multi-level marketing sales of Yummy Stuff—what are some ways this accident will affect her business? Perhaps she will not be able to make already scheduled appointments or networking events. Perhaps she will not be able to help her team grow their businesses. If she is not her sparkly self due to pain, she may not get new appointments or new team members.
Susie should be compensated by the at fault parties’ insurance companies.
What do the insurance companies pay for after an accident? The easy part is they will pay her medical bills. They will pay for the car damage, the damage to the laptop, and other items in the trunk which were damaged by the crash. They will compensate for pain and suffering. They also owe accident-related wage loss. If Susie had a regular job, she could collect wage loss for the hours her doctor took her off work due to the accident. There would be a work excuse—off work until June 1 and the loss would be pretty easy to calculate, in other words the number of hours off times the hourly rate of pay.
Calculating the losses incurred by a self-employed person is much more difficult. The insurance company wants proof of losses.
Susie needs to work to document her losses
She can still get a written work excuse from her doctor to show she isn’t supposed to work for a certain number of days or weeks. The work excuse may state restrictions on how many hours she can put in at her desk.
Sometimes the doctors say things like “activity as tolerated” rather than listing restrictions. This makes documenting more of a challenge.
Keep journaling about losing time from work in the business—“I tried to work for four hours and then had to lay down with the heating pad…”
Since Susie’s business is several years old, we do have another way to measure her self-employment losses. This is to compare the income she produced after the accident to the income she was producing before the accident. This could be an average per month or on a yearly basis. This is only worth doing if the accident actually decreased Susie’s income! Then it might be possible to show that in 2011 and 2012, Susie’s business grew every month and her income averaged $500 a month in 2011 and $1000 a month in 2012. Susie was on track to make $1500 a month in 2013 when the accident occurred, and after that the books show a decrease to $300 a month for X number of months, making a loss of $1200 per month for those months…this claim would need to be proven with tax records and other business records. So in order to prove business loss, Susie will give up privacy and will need to share her records.
Similarly it is possible to look at the rate of growth of Susie’s team prior to the accident—say she added one member per month. The past performance could be analyzed and then we would know the average amount of income each member means to the team leader. If after the accident, Susie didn’t add any more team members for six months, we could calculate how much additional income she lost over those six months by losing those potential employees.
Unfortunately these calculations can get complicated and may require an expert economist report—then Susie has to decide whether it is an expense she wants to incur to prove a loss that is somewhat speculative.
If Susie can show she had appointments which she missed due to the accident and that these potential clients refused to reschedule and took their business elsewhere, she could multiply these lost business opportunities by the amount of profit each customer averages for her.
But I usually find that after an accident an entrepreneur is going to figure out a way to help her potential clients, even if she has to go to the appointment on crutches, or handle things by phone or email. This means that the amount of business loss is reduced—which is a good thing for the entrepreneur’s business!
The aftermath of an accident is a confusing time, so it helps to have thought through what needs to be done as we sit here safe and sound today.
Please contact Sally A. Hestad at Hestad Law if you have any questions after a Wisconsin accident, firstname.lastname@example.org.