Casualty Actuarial Society (CAS) Practice Exam

The purpose of punitive damages is to punish a wrongdoer for their actions and to deter similar conduct in the future. They are typically awarded in cases where the defendant's behavior is found to be particularly egregious, malicious, or reckless. Unlike compensatory damages, which aim to reimburse the victim for actual losses suffered (such as medical expenses or lost wages), punitive damages are not intended to compensate the victim but to serve as a form of societal condemnation of the wrongdoing. By imposing these damages, the court sends a message that such behaviors are unacceptable and encourages both the wrongdoer and others in society to refrain from engaging in similar actions. This dual purpose of punishment and deterrence is crucial in maintaining accountability and promoting ethical conduct within the community.