Indemnity

Definition

• An agreement where one party is contractually obligated to assume liability and compensate or provide reparation for damages or losses. Commonly used in the insurance industry, a company will agree to indemnify another for insured losses.

Synonyms
compensation, protection, restitution, reimbursement, security against loss

Related Terms and Acronyms

• Aggregate Limit of Liability — Definition,
  • A restriction on the amount of liability an insured entity can place on an insurer in a specific time period.
• Indemnity Insurance — Definition,
  • A class of insurance that covers liability for damages, which includes insurance types such as malpractice insurance and errors and omissions insurance.
• Liability Insurance — Definition,
  • Insurance that provides coverage for damages caused by an individual or entity's negligence or legal responsibilities.
• Loss Settlement Amount — Definition,
  • The percentage of damages an insurer is contractually obligated to pay for after a claim.
• Period of Indemnity — Definition,
  • The amount of time where insurance benefits are required to be paid by an insurance policy.
• Specific Performance — Definition,
  • A remedy in a court of equity compelling a defendant to carry out the terms of an agreement or contract. It is available only where the remedy of damages cannot afford adequate relief to the plaintiff.
• Subrogation — Definition,
  • When an insurance company has the right to take legal action against a third party for damages.
• Waiver of Subrogation (WOS) — Acronym,
  • A provision that prevents an insurer from pursuing a third party for damages to insured property.