What is the difference between compensatory and punitive damages?

Compensatory damages and punitive damages are two types of damages a person may receive from a lawsuit in Alabama. Compensatory damages, also known as “actual damages,” are awarded to an injured person to cover his or her actual losses from an accident. These damages are intended to cover the financial losses resulting from the incident, including medical bills, lost wages, and pain and suffering. Punitive damages, or “exemplary damages”, are awarded beyond compensatory damages and are intended to punish a wrongdoer. These damages are usually awarded if the wrongdoer’s behavior is deemed particularly egregious or intentionally malicious. Punitive damages are not always awarded in accident cases and are not intended to cover the financial losses of the injured person, but rather to punish the defendant for his or her wrongful behavior. Both compensatory and punitive damages can be awarded in a lawsuit under Alabama accident law. Compensatory damages are intended to cover financial losses from an accident while punitive damages are intended to punish the wrongdoer. In any case, an injured person must prove their losses in order to be eligible for damages.

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What is the difference between compensatory and punitive damages?

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