When you are injured in an accident and file a claim for monetary damages, you are likely to hear about both compensatory and punitive awards. While both of these awards are important, they mean different things to you as an accident victim. Here are some of the key differences between compensatory damages and punitive damages in personal injury claims and what they mean for you.

Compensatory Damages Help the Injured Party

When someone sustains an injury, it is likely that they will need to visit the doctor for treatment of the injury. Significant injuries may require multiple visits, and medical treatment can be very expensive, especially for someone who does not have health insurance. A compensatory damage award is a monetary sum paid to the injured party by the at-fault party to assist them with the financial burden that arose from their injury.

Punitive Damages Hold Defendants Accountable

Punitive damages are similar to compensatory damages in that the injured party receives a financial reimbursement from the party found to be at fault for their injury. However, the point of paying punitive damages is not to help the victim pay for things such as medical bills, but rather, to act as a form of discipline and to signal to other people that acting in a way that is negligent is something that courts will take seriously.

The Two Damages Stem From Different Types of Suits

Compensatory and punitive damages are each associated with different types of lawsuits. For example, victims generally see punitive damages when a lawsuit finds that the other party acted in a way that was negligent or when that party knew that their actions could cause harm to other people. On the other hand, compensatory damages arise from suits where someone still acted negligently but did not necessarily intend on hurting someone else. Keep in mind, however, that someone may receive both compensatory and punitive damages from the same lawsuit.

Cases Resulting in Punitive Awards

Some examples of cases that result in punitive awards include:

  • Incidents of medical or pharmaceutical malpractice
  • Cases that arise because several people are injured from a faulty product 
  • Lawsuits that come about because someone purposely injured the other party in some way 

Punitive damages are less common than compensatory damages and generally result from cases where the injury is more serious.

Cases Resulting in Compensatory Awards

Compensatory damages are more common and are the type of award that most people think of when they imagine a lawsuit. People may be awarded compensatory damages after:

  • Being involved in a motor vehicle accident 
  • Sustaining an injury at work 
  • Falling and becoming injured on an icy sidewalk or parking lot due to a business failing to maintain their property

Expect a compensatory award to cover things such as medical bills and lost wages due to one of those types of accidents.

Punitive Damages May Pay More 

In general, punitive awards are larger than compensatory awards due to the seriousness of the cases involved and to act as an additional deterrent to the guilty party. Compensatory damages tend to be capped at an amount that relates to how badly the victim was injured and what sort of medical bills they incurred. On the other hand, there is no cap on punitive damages. This means that someone could end up paying a very high amount of money as punishment for causing an injury; however, most punitive awards max out at around four times the compensatory award for the same case.

There Are Two Types of Compensatory Damages

Because compensatory damages are the more common type of award of the two, it is necessary to discuss the two types that someone might be awarded in a lawsuit.

Actual Damages

Actual, or special, damages refer to the financial assistance provided to help with actual medical bills and similar. This can include anything from physical therapy to the ambulance ride to the hospital to lost wages resulting from the injury. Actual damages are relatively simple to calculate because the amount to be reimbursed is generally provided on the medical billing statement or other receipt.

General Damages

General damages, by nature, are more difficult to calculate since there is often not a bill or other statement associated with the things reimbursed by general damages. General damages may cover such things as loss of opportunity in the future, pain and suffering, and inconvenience.

It is important to consider both actual and general damages when deciding on a compensatory damage award.

Need Assistance After an Injury?

If someone has purposefully or negligently caused you to become ill or injured, you should seek help as soon as possible. Contact us at the Law Offices of Brent D. George today for a free consultation and get started on recovering the financial damage caused by your injury.