Payments awarded by a court in a liability suit. Money damages can be broken down into compensatory and punitive. Compensatory damages reimburse a plaintiff for expenses incurred for such things as disability, disfigurement, and pain and suffering. Punitive damages go beyond this to punish and make an example of a defendant. In recent years, punitive damages have become increasingly common, and insurers claim that the frequency of multimillion dollar jury awards has made the business of underwriting difficult.