Compensatory is a term used to describe payment for actual damage or injury in a claim. It must be determined that there was actual injury or loss. Then the process is to determine how much was loss and how much you suffered. Then the damages are awarded to compensate you.

There can be punitive damage when a person is punished by the award of a financial penalty for the act causing the damage. This is also used to send a message out that this is unacceptable.

The courts in the United States often award punitive damage. This is rare in Canada but has occurred when the circumstances are so bad that the judge or jury feels it is appropriate.

The wordings in your insurance policy may limit any payout for your wrong-doing to compensator only. If you were in that bad situation and there was an award made against you for punitive damage then you would be on your own. You would have to find the resources to deal with that financial impact as insurance would stop at compensatory.

Talk to your agent or broker. Control your insurance.