What is indemnity insurance

Indemnity is an agreement between two parties in which one party is responsible for compensating another for damages or losses they may incur. Indemnity insurance protects a policyholder from indemnity claims in exchange for monthly or annual premiums.

Why do I need indemnity insurance?

Indemnity insurance protects against claims arising from possible negligence or failure to perform that result in a client's financial loss or legal entanglement. A client who suffers a loss can file a civil claim.

What is an example of an indemnity?

The most common example of indemnity in the financial sense is an insurance contract. For instance, in the case of home insurance, homeowners pay insurance to an insurance company in return for the homeowners being indemnified if the worst were to happen.

What is the purpose of indemnity?

To indemnify means to compensate someone for his/her harm or loss. In most contracts, an indemnification clause serves to compensate a party for harm or loss arising in connection with the other party's actions or failure to act. The intent is to shift liability away from one party, and on to the indemnifying party.