What term describes an award that is intended to financially compensate for direct harm caused?

The correct term for an award meant to financially compensate for direct harm caused is compensatory damages. This type of damage is designed to restore the injured party to the position they were in before the harm occurred, covering actual losses such as medical expenses, lost wages, and pain and suffering directly resulting from the incident.

In contrast, regulatory penalties refer to fines imposed on individuals or organizations for violating regulations or laws, which do not focus on compensating a victim for harm but rather on discouraging noncompliance. Punitive damages are intended to punish the wrongdoer for particularly egregious or reckless behavior and to deter similar conduct in the future; they are not primarily focused on compensating the injured party. Nominal damages are small amounts awarded when a legal wrong has occurred but did not result in significant loss or injury; these do not serve to compensate for actual harm but rather recognize that a legal wrong took place. Thus, compensatory damages specifically address the need for financial recovery from direct harm, making it the appropriate choice.