Compensatory Damages

AAA

DEFINITION of 'Compensatory Damages'

Money awarded to a plaintiff to compensate for damages, injury, or another incurred loss. Compensatory damages are awarded in civil court cases where loss has occurred as a result of the negligence or unlawful conduct of another party. To receive compensatory damages the plaintiff has to prove that a loss occurred, and that it was attributable to the defendant. The plaintiff must also be able to quantify the amount of loss in the eyes of the jury or judge.

INVESTOPEDIA EXPLAINS 'Compensatory Damages'

Compensatory damages differ from punitive damages, which may compensate over and above any loss or damage incurred and are meant to provide an incentive against repeating the act that caused the plaintiff's loss or damages.


Cases related to compensatory and punitive damages are a major source of debate in the field of health insurance, as proponents of tort reform claim that excessive damages above the actual loss incurred increase the overall cost of healthcare.

RELATED TERMS
  1. Unsatisfied Judgment Fund

    An amount of money set aside by certain states to cover uncompensated ...
  2. Litigation Risk

    The possibility that legal action will be taken because of an ...
  3. Default Judgment

    A binding judgment issued by a court in favor of the plaintiff ...
  4. Holocaust Restitution Payments

    Money paid by the governments of Germany and Austria to partly ...
  5. Restitution Payments

    The payment of punitive damages that are owed as a result of ...
  6. Comparative Negligence

    A principle of tort law that applies to casualty insurance in ...
Related Articles
  1. Home & Auto

    The History Of Insurance In America

    Insurance was a latecomer to the American landscape, largely due to the country's unknown risks.
  2. Home & Auto

    How To Avoid Medical Debt

    Find out what you can do to avoid a financial meltdown when there's a medical emergency.
  3. Home & Auto

    When Things Go Awry, Insurers Get Reinsured

    Guru Warren Buffett is making this sector popular. Learn more here.
  4. Insurance

    Avoid The No-Health-Insurance Penalty By Feb 15

    If you don't have health insurance, act NOW or you could owe penalties on your 2015 taxes, in addition to this year's.
  5. Insurance

    Rating Assurant Prepaid Vs. Delta PPO dental plans

    As more consumers – and dentists – join insurance plans, here’s help in choosing benefits that are right for you.
  6. Insurance

    Who (Besides Retirees) Can Get Medicare?

    People think you need to be 65 before you're eligible for Medicare. But you might be eligible before then. Here's who can be covered – and when.
  7. Insurance

    Who are the best-rated life insurance companies in the US?

    Learn about what makes an insurance company the best. Read about the best life insurance companies in the U.S. in 2014, following ratings by Weis.
  8. Insurance

    What are some examples of when insurance bundling is a bad idea?

    Learn about situations where insurance bundling may not be a favorable option. Bundling insurance is often a good idea, but there are times when it isn't.
  9. Insurance

    Choosing A Health Plan For Your Chronic Illness

    Thanks to the Affordable Care Act, you can no longer be denied health insurance for having a pre-existing or chronic medical condition.
  10. Insurance

    Does That Dental Insurance Have Cavities?

    Four key factors to check out before you just sign up for dental insurance. The coverage could be really worth it – or not.

You May Also Like

Hot Definitions
  1. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  2. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  3. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  4. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  5. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
  6. Bank Guarantee

    A guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor ...
Trading Center