Which damages are intended to compensate the claimant for losses and do not include punitive damages?

• A. Punitive Damages
• B. Nominal Damages
• C. Liquidated Damages
• D. Compensatory Damages

Answer: (D)

Compensatory damages are designed to reimburse the claimant for actual losses suffered, whether those losses are economic (like medical bills or lost wages) or noneconomic (such as pain and suffering). The goal is to put the claimant back in the position they would have been in had the loss not occurred, which is why punitive elements aren’t part of this category. Punitive damages, by contrast, are meant to punish wrongdoing and deter future behavior, not to compensate the victim. Nominal damages are a minimal acknowledgment of a rights violation when no real loss is proven, so they don’t reflect actual losses. Liquidated damages are pre-agreed sums set in a contract to estimate damages in advance and aren’t necessarily tied to the actual losses suffered.