Theo Abrams
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INDEMNITY definition: 1. protection against possible damage or loss, especially a promise of payment, or the money paid…. Learn more.
- What Is Indemnity?
- How Indemnity Works
- Special Considerations
- History of Indemnity
- The Bottom Line
Indemnity is a comprehensive form of insurance compensation for damage or loss. When the term indemnity is used in the legal sense, it may also refer to an exemption from liability for damage. Indemnity is a contractual agreement between two parties. In this arrangement, one party agrees to pay for potential losses or damage. A typical example is a...
An indemnity clause is standard in the majority of insurance agreements. However, exactly what is covered, and to what extent, depends on the specific agreement. Any indemnity agreement has what is called a period of indemnity, or a specific length of time for which the payment is valid. Similarly, many contracts include a letter of indemnity, whic...
How Indemnity Is Paid
Indemnity may be paid in the form of cash, or by way of repairs or replacement, depending on the terms of the indemnity agreement. For example, in the case of home insurance, the homeowner pays insurance premiums to the insurance company in exchange for the assurance that the homeowner will be indemnified if the house sustains damage from fire, natural disasters, or other perils specified in the insurance agreement. In the event that the home is damaged significantly, the insurance company wi...
Indemnity Insurance
Indemnity insuranceis a way for a company (or individual) to obtain protection from indemnity claims. This insurance protects the holder from having to pay the full sum of an indemnity, even if the holder is responsible for the cause of the indemnity. Many companies make indemnity insurance a requirement, as lawsuits are common. Everyday examples include malpractice insurance, which is common coverage for those in the medical field, and errors and omissions insurance (E&O), which protects com...
Acts of Indemnity
An act of indemnity protects those who have acted illegally from being subject to penalties. This exemption typically applies to public officers, such as police officers or government officials, who are sometimes compelled to commit illegal acts in order to carry out the responsibilities of their jobs. Often, such protection is granted to a group of people who committed an illegal act for the common good, such as the assassination of a known dictator or terrorist leader.
Although indemnity agreements haven't always had a formal name, they are not a new concept. Historically, indemnity agreements have served to ensure cooperation between individuals, businesses, and governments. In 1825, Haiti was forced to pay France what was then called an "independence debt." The payments were intended to cover the losses that Fr...
Indemnity is a type of insurance compensation paid for damage or loss. When the term is used in the legal sense, it also may refer to an exemption from liability for damage. Indemnity is a contractual agreement between two parties in which one party agrees to pay for potential losses or damage caused by another party. Typically, an insurance contra...
The meaning of INDEMNITY is security against hurt, loss, or damage. How to use indemnity in a sentence.
In contract law, an indemnity is a contractual obligation of one party (the indemnitor) to compensate the loss incurred by another party (the indemnitee) due to the relevant acts of the indemnitor or any other party.
Indemnity is commonly used in legal contracts to secure protection against being sued or being held responsible for an accident. It’s often seen in the phrase indemnity clause. The verb form of indemnity is indemnify, which means to provide such protection or security, typically in the form of insurance.
indemnity for/against sth The policy provides an indemnity for loss of or damage to third-party property. provide/offer (an) indemnity This insurance provides indemnity against legal costs and damages .
[uncountable] indemnity (against something) protection against damage or loss, especially in the form of a promise to pay for any damage or loss that happens. an indemnity clause/fund/policy; indemnity insurance
