Compensation Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Compensation, written in plain English, along with examples of how it is used.
What is Compensation?
1\) Amount paid to a worker for any knid of injury suffered in the work place is called workers’ compensation.It also includes wages, bonuses , various kinds of allowances, insurance benefits etc. 2)the amount paid by an insurance company to the insured for any loss or damages sudffered after satisfying the facts stated in the insuranc policy is also called compensation.
History and Meaning of Compensation
Compensation is a term used to describe payment in exchange for goods, services, or losses incurred. It has roots in the Latin word "compensare" meaning "to weigh one thing against another" and has been used since the 14th century. In modern usage, it commonly refers to the payment made by an employer to an employee in exchange for their time and work.
There are many types of compensation, including base pay, bonuses, benefits, and stock options. Compensation can also refer to payment made to an individual or entity as restitution for a loss or injury.
Examples of Compensation
- An employee receives a salary of $50,000 per year in addition to a bonus of $5,000 based on their performance.
- A victim is awarded $100,000 in compensation by a court for injuries sustained in a car accident.
- An insurance company pays out $10,000 in compensation to a policyholder whose house was damaged in a storm.
Legal Terms Similar to Compensation
- Damages: Payment made to an individual as restitution for a loss or injury.
- Restitution: Payment made to restore something that was taken or lost.
- Remuneration: Payment made to an individual in exchange for their services or work.