Which type of damages aims to compensate for actual losses?

Compensatory damages are designed specifically to provide restitution for actual losses that a plaintiff has suffered as a result of a defendant's wrongful conduct. The primary goal of these damages is to restore the injured party, as closely as possible, to the position they were in before the harm occurred. This includes the reimbursement for medical expenses, lost wages, property damage, and other direct financial losses.

In contrast, punitive damages serve a different purpose—they are intended to punish the wrongdoer for particularly egregious behavior and deter others from similar actions, rather than to compensate for losses. Nominal damages are awarded in cases where a legal wrong has occurred but no significant harm or economic loss was demonstrated; these are often symbolic rather than compensatory. Statutory damages, meanwhile, are predetermined amounts set by legislation, designed to simplify the process of claiming damages for certain types of violations without needing to prove actual losses.

Thus, the focus of compensatory damages on reimbursing actual losses distinguishes it as the correct choice in addressing this question.