Ex gratia is Latin for ‘by favour’, and is used to refer to something that has been done out of kindness or grace. At law, an ex gratia payment is a voluntary act, usually done from a sense of moral or social obligation, made without any admission of legal liability, and not because of any legal requirement or order.
For example, governments or corporations may compensate alleged victims (often in class actions or large lawsuits) by issuing an ex gratia payment. This satisfies the claimant, whilst allowing the entity to escape an admission of guilt or liability.
Insurance companies may sometimes offer compassionate ex gratia payments to customers where their claim is not covered by their policy, but their circumstances are dire or tragic.