Which of the following best describes punitive damages?

Punitive damages are primarily aimed at deterring wrongful conduct and are awarded over and above actual damages. The purpose of these damages is not to compensate the injured party for losses but to punish the wrongdoer for egregious behavior and thereby discourage similar actions in the future. The amount awarded in punitive damages is often substantial, reflecting the gravity of the defendant's misconduct and serving as a warning to both the defendant and others who might be tempted to engage in similar behavior.

In contrast, the other options describe different aspects of damages: compensation for injured parties focuses on making them whole after suffering a loss, which is characteristic of compensatory damages, while actual financial loss refers specifically to monetary compensation for direct losses incurred. Statutory damages, on the other hand, are predetermined amounts established by legislation rather than determined by the specifics of the case's circumstances. Thus, the distinguishing feature of punitive damages is their emphasis on discouragement of unacceptable behavior rather than direct compensation.