Economic losses, sometimes loosely referred to as financial losses, are monetary damages, or those demonstrable on a balance sheet. There is an important distinction between economic losses and pure economic losses that people filing an insurance claim should understand.
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Economic Losses vs. Pure Economic Losses
Economic losses can refer to any type of financial loss you’ve suffered as a result of an injury or damage. For instance, if you’ve been seriously injured in a car accident, your economic losses might include:
- hospital bills;
- lost wages;
- property damage;
- the cost of remodeling your home to accommodate disabilities you suffered as a result of the accident; and
- the cost of hiring someone to perform the household tasks you normally would perform had it not been for your injury.
Whereas economic damages are consequential of a personal injury, pure economic losses are those that are unrelated to an injury. They are financial losses that are often commercial in nature.
They are related to financial loss only, not physical or emotional. This might include damages such as:
- lost property value;
- loss of profit; or
- loss of profitability.
Generally speaking, most economic losses are recoverable on an insurance claim. However, if the damages are purely economic in nature and are not the result of an injury, they are not compensable on an insurance claim. Pure economic losses fall under a different area of the law: contractual law.
Ontario Law Lacks Clarity on Economic Losses
If your financial losses are related to an injury that you sustained as the result of negligence, you most likely will be able to pursue restitution for those damages.
Unfortunately, Statutory Accident Benefits Schedule (SABS) isn’t very clear when it comes to defining what can and can’t be considered economic losses on injury claims. In recent cases on the circuit, the Ontario Court of Appeal has refused to offer a clear definition of economic losses, leaving the term to a wide range of interpretation.
Canadian Underwriter shares Judge Ray’s opinion on the topic: “Economic loss has been defined ‘in very broad terms in claims for compensation in tort law cases, and has been the subject of a great deal of jurisprudence because of the difficulty in quantification.'”
Determining Which Damages are Compensable for Your Claim
The best way to determine which losses are compensable and what legal avenues are available for recovering those losses is to speak to a lawyer.
Your lawyer will be able to:
- review your case;
- investigate fault and negligence;
- explain your rights and responsibilities;
- quantify your economic losses; and
- help you proceed with the steps for recovering compensation.
If you are filing an insurance claim to recover your losses, it’s important to have a legal professional review your claim before you submit or agree to a settlement amount.
This is because you might be eligible for more compensation than you’re aware. Your lawyer can help ensure that the full extent of your damages is accounted for and that you receive the maximum amount of compensation to which you’re entitled.
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Preszler Law Can Help Calculate Your Economic Losses
If you are filing a claim in Ontario, contact our firm for counsel. We can evaluate your case and explain your legal options. Contact us today at 1-800-JUSTICE® for a free consultation.