Which type of damages covers actual loss or injury?

Compensatory damages are designed specifically to cover actual losses or injuries that a plaintiff has suffered as a result of another party's actions. These damages aim to restore the injured party to the financial position they were in prior to the loss. Compensatory damages can be broken down into two main categories: special damages, which cover quantifiable monetary losses such as medical expenses and lost wages, and general damages, which address non-monetary aspects like pain and suffering or emotional distress.

Understanding the nuance between these types of damages enhances clarity in legal contexts. For example, punitive damages are intended to punish wrongdoers and deter future misconduct rather than to compensate the victim, and thus do not cover actual loss or injury.