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What Does “Impairment of Earning Capacity” Refer to?

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What Does “Impairment of Earning Capacity” Refer to?

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Impairment of earning capacity is not a common term but is an unfortunately common phenomenon. When someone suffers an injury or illness that affects their ability to return to their chosen profession, work the same hours as they did before, or perform the same job, it is likely that their earning capacity will be impaired. A person’s earning capacity refers to the amount of money a person generally makes based on their inherent or acquired skill set. When an injury or illness affects that temporarily or permanently, this qualifies as an impairment of their earning capacity.

It’s important to note that lost wages and impairment of earning capacity are two separate damages in a personal injury claim. Lost wages refers to wages that have already been lost and/or will continue to be lost during the injury victim’s recovery period, and does not account for the damage to that person’s earning capacity. If you or a loved one were injured due to another party’s negligence, talk to a personal injury attorney about your options for physical and financial recovery.

Impairment of earning capacity generally occurs in cases of catastrophic injury.

A minor fender-bender is unlikely to result in injuries severe or long-lasting enough to impair someone’s earning capacity. However, if someone suffers a hip injury in a vehicle or other accident and even after reaching maximum medical recovery will not be able to bend or lift as they did before, this could have a significant impact on their ability to perform their job. Lasting orthopedic injuries, brain injuries, and spine injuries are a few common types of injuries that may result in an impairment of earning capacity in addition to other damages.

Damages in a personal injury claim refer to financial expenses or personal losses which occur due to a wrongful injury and may be compensable.

Damages that may be included in a personal injury claim include:

  • Past, present, and future medical expenses
  • Lost wages
  • Impairment of earning capacity
  • Lifecare expenses
  • Vocational rehabilitation
  • Pain and suffering
  • Mental anguish
  • Wrongful death
  • Funeral expenses
  • Punitive damages

If your injury could have been prevented by reasonable attention to basic safety, you may be eligible to file a personal injury claim.

If you suspect impairment of earning capacity may be applicable to your case, it is especially important to talk to an attorney.

The danger with handling any case where impairment of earning capacity may be involved is that the true value of that impairment can be difficult to calculate without an expert. Unfortunately, this often results in injured people receiving settlement offers that are too low to compensate for the actual loss and leave the victim and their family high and dry in the future. It can be difficult to identify a viable personal injury claim without the help of a professional.

Personal injury attorneys can help evaluate your case and can even direct you to supportive resources to help with your recovery period. If hiring an attorney seems like just another expense, it may help to note that most personal injury attorneys offer free consultations and work on a contingency fee basis, which means clients don’t pay unless they win. To learn more about your case or for help seeking damages for impairment of earning capacity after your injury, talk to a personal injury attorney.

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