In what scenario are compensatory damages typically awarded?

Compensatory damages are awarded to cover losses incurred by the victim, making this the correct choice. These damages are intended to restore the injured party to the position they would have been in had the wrongful act not occurred. The primary aim is to compensate the victim for actual losses, which can include medical expenses, lost wages, property damage, and other measurable costs directly linked to the wrongdoing.

In contrast, punitive damages, which are meant to punish the offender and deter similar conduct in the future, fall under a different category and would be associated with intentional wrongdoing rather than compensatory actions. Additionally, while some legal remedies aim to prevent future illegal acts or enforce contracts, these fall outside the scope of compensatory damages, which are strictly focused on making the victim whole for their specific losses. The purpose of compensatory damages is thus quite distinct from these other legal objectives.