Loss of Earning Capacity

Loss of earning capacity refers to a decrease in an individual’s ability to earn money due to an injury or illness. This concept is often considered in legal and insurance contexts, where someone may seek compensation for the income they could have earned if not for the incident. It takes into account factors such as age, education, work experience, and the nature of the injury. Unlike lost wages, which cover earnings already missed, loss of earning capacity looks at the future potential income that is now diminished because of the person's condition.