Lost Business Income Compared to Lost Wages
By: Mandy Milner
Lost wage claims are common in Georgia personal injury litigation. These claims are governed by O.C.G.A. § 51-12-1(b), which allows the trier of fact to consider nearly all forms of income replacement or disability benefits available to an injured party. Specifically, it provides as follows:
In any civil action, whether in tort or in contract, for the recovery of damages arising from a tortious injury in which special damages are sought to be recovered or evidence of same is otherwise introduced by the plaintiff, evidence of all compensation, indemnity, insurance (other than life insurance), wage loss replacement, income replacement, or disability benefits or payments available to the injured party from any and all governmental or private sources and the cost of providing and the extent of such available benefits or payments shall be admissible for consideration by the trier of fact.
O.C.G.A. § 51-12-1(b) (emphasis added).
Generally, the measure of an individual’s lost earnings is straightforward: the actual loss or reduction in earnings from the date of injury until the time of trial. Davis v. Scriven, 2021 Ga. State LEXIS 8327, *2 (January 29, 2021) (citing Carroll v. Morrison, 116 Ga. App. 575, 576 (1967)). To prevail, a plaintiff simply needs to provide evidence of their compensation rate and the time missed. Id.
However, unique challenges arise if a plaintiff is a business owner. If a plaintiff seeks to recover the lost profits of their business, Georgia law treats this as a separate claim belonging to a separate entity. Whether a corporation1 or a limited liability company,2 these entities are distinct from their shareholders and members. Consequently, a shareholder or member is generally not a proper party to bring a proceeding on behalf of their company.
Given the speculative nature of lost profits, plaintiffs must meet an evidentiary standard to recover them:
The general rule as to the recoverability of lost profits as an item of damages is that the expected profits of a commercial venture ‘are not recoverable as they are too speculative, remote, and uncertain.’ Underlying this rule is the rationale: The profits of a commercial business are dependent on so many hazards and chances, that unless the anticipated profits are capable of ascertainment, and the loss of them traceable directly to the defendant's wrongful act, they are too speculative to afford a basis for the computation of damages.
Johnson Cnty. Sch. Dist. v. Greater Savannah Lawn Care, 278 Ga. App. 110, 112 (2006) (internal quotation marks omitted).
To overcome this, a plaintiff must present evidence, with “great specificity,” of the business’s “probable gain as well as the expenses incurred in realizing such gain.” Plaintiffs must provide “information or data sufficient to enable [a jury] to estimate the amount of loss with reasonable certainty. Generally speaking, this means that they must be provided with figures establishing the business's projected revenue as well as its projected expenses.” Id. (internal quotation marks omitted).
Thus, a plaintiff can recover lost wages by showing the actual loss of earnings from the time of the injury until trial. However, if a plaintiff seeks lost business profits, carriers and defense practitioners must evaluate whether the plaintiff has the proper standing to bring the claim and whether the plaintiff has made the specific showing of the business’s projected revenue and expenses.
1 “[C]orporations are separate legal entities from their shareholders, officers, directors, and employees. This is so even in the situation in which a corporation is owned solely by one person.” VanDolah v. Webb, 375 Ga. App. 638, 641 (2025) (citing Emson Investment Properties v. JHJ Jodeco 65, LLC, 349 Ga. App. 644, 648 (2) (2019)).
2 Under Georgia law, a limited liability company “shall have the same powers as any person has to do all things necessary to carry out its purpose, business, and affairs.” O.C.G.A. § 14-11-202. Limited liability companies are separate legal entities from their members. Sentinel Ins. Co. v. USAA Ins. Co., 335 Ga. App. 664, 667 (2016). “A member of a limited liability company similarly is considered separate from the company and is not a proper party to a proceeding by or against a limited liability company, solely by reason of being a member of the limited liability company.” Global Diagnostic Dev., LLC v. Diagnostic Imaging of Atlanta, 284 Ga. App. 66, 69 (2007). See also Old Nat'l Villages, LLC v. Lenox Pines, LLC, 290 Ga. App. 517, 520 (2008).
Attorney Contact Info
Mandy Milner
mandy.milner@swiftcurrie.com
404.888.6122
