South Carolina Personal Lines Practice Exam

What is the purpose of punitive damages?

1. To compensate for loss

2. To punish for negligence or willful intent

3. To cover medical expenses

4. To provide future benefits

The correct answer is: To punish for negligence or willful intent

Punitive damages serve a specific purpose in the legal system, distinct from compensatory damages. Their primary function is to punish a defendant for particularly egregious conduct and to deter similar behavior in the future. This kind of damage is not focused on compensating the victim for losses incurred, but rather on making an example of the wrongdoer in order to discourage such actions by that individual and others. In situations where a defendant's conduct is found to be especially harmful, negligent, or intentional, the court may impose punitive damages as a form of legal retribution. This approach emphasizes not only accountability but also the aim of protecting society by discouraging reckless or malicious behavior. Other responses, while relevant in their own contexts, do not capture the essence of punitive damages. For instance, compensatory damages are intended to reimburse the plaintiff for actual losses suffered, such as medical expenses or loss of income, rather than to punish the wrongdoer. Similarly, coverage for medical expenses or providing future benefits relates to compensatory elements of legal damages rather than the punitive aspect intended to address wrongful conduct.