Can you claim lost income after a car accident if you are self-employed in Ontario?
Self-employed and hurt in a car accident in Ontario? See whether you can claim lost income, how much you may be entitled to, and what records you will need
CAN YOU CLAIM lost income after a car accident if you are self-employed in Ontario? Yes, in two ways: through the income replacement coverage on your own auto policy, if you bought it, and through a lawsuit against the driver at fault. Both depend on proving what you earned.
When an employee is hurt in a car accident, a pay stub shows what they earned. When the owner of a small business is hurt, nothing is that simple. The work stops, the invoices stop, and the insurer asks a question many owners cannot answer quickly: what were you really earning?
This is general information about Ontario law, not legal advice. Every claim turns on its own policy and its own records.
Does my auto insurance still replace my income?
Only if you bought that coverage. Since July 1, 2026, the income replacement benefit has been an optional purchase on an Ontario auto policy.
Medical, rehabilitation and attendant care benefits are still included in every policy. Income replacement is not. The rules are in the Statutory Accident Benefits Schedule, the regulation that sets out what an auto insurer pays after an accident, whoever caused it.
For a self-employed person this is the first thing to check, and the time to check is before anything happens. Ask your broker one question: does my policy include income replacement, and at what weekly limit?
How much does the benefit pay?
It pays 70 percent of your gross weekly income, up to the weekly limit you bought. Nothing is paid for the first week you cannot work.
Before the change, the standard limit was $400 a week. Now the limit is the one set by the coverage you bought. For an owner who draws far more than the limit from the business, the limit decides the payment, not the 70 percent. An owner who earns $2,000 a week would be owed $1,400 at 70 percent, but receives only $400 under a $400 limit.
How is a self-employed person’s income measured?
It is measured from what the business earned in your last completed tax year, worked out under federal income tax rules. That means profit, not sales.
Two consequences follow.
- A good year in progress may not count the way you expect. If the business doubled this year and the crash happened in October, the starting point is still last year’s return.
- Income you did not report does not count. The Schedule ignores any income that was left off a tax return. Cash work that was never declared cannot be added back to raise the benefit.
What records prove the loss?
The same records you keep for the Canada Revenue Agency, as long as they are up to date. Insurers and courts both rely on paper, not on an owner’s estimate.
The most useful are:
- Tax returns and financial statements. Have the last two or three years ready.
- Invoices, contracts and bank statements. They show the work that was coming in before the accident.
- Cancelled or lost jobs. Keep the emails and quotes for work you had to turn down.
- The cost of a replacement. If you hired someone to do what you used to do, the invoices show what your own work was worth.
- A calendar of the days you could not work. Write it as you go, not from memory months later.
- Your doctor’s notes. They tie the time off to the injury, which is what the insurer will question first.
An accountant’s report often settles the argument. If a report by a qualified accountant is reasonable and necessary to work out your income, the Schedule requires the insurer to pay for it, up to $2,500.
What if the benefit does not cover the loss?
A lawsuit against the driver who caused the crash can claim the income that the benefit does not reach, including income you will lose in the future.
For an owner who earns well above the weekly limit, this is where the rest of the loss is claimed, and it is where records matter most. A Toronto car accident lawyer will usually work with a forensic accountant to show what the business would have earned if the accident had not happened.
There is a harder case to plan for. If you did not buy income replacement and nobody else was at fault, there may be nowhere to claim lost income at all. That is the strongest reason to read your policy now.
What are the deadlines?
Tell your own insurer within seven days, return the completed accident benefits application within 30 days of receiving the forms, and start any lawsuit within two years.
Each deadline has exceptions, but do not count on them. Missing the first two can delay benefits. Missing the third can end the claim.
What should a business owner do this week?
Three things, none of which costs much.
- Read your auto policy. Find out whether income replacement is on it and at what limit.
- Keep your business records up to date. A claim is only as strong as the last return you filed.
- Report everything you earn. Income you never declared cannot be counted after a crash.
This article was prepared with Vaturi & Cho LLP, personal injury lawyers in North York who act for people injured in car accidents across Ontario.