Erum Education

 What Is Indemnity? Indemnity is a comprehensive form of insurance compensation for damages or losses. When the term indemnity is used in a legal sense, it can also refer to an exemption from liability for damages. Indemnity is a contractual agreement between two parties. In this agreement, one party agrees to pay for potential losses or damages caused by another party. A typical example is an insurance contract, in which the insurer or the indemnifier agrees to compensate the other (the insured or the indemnified) for any damage or loss in exchange for premiums that the insured pays to the insurer. With indemnity, the insurer indemnifies the policyholder – that is, it promises to compensate the individual or business for any covered loss. KEY TAKEAWAYS Indemnity is a comprehensive form of insurance compensation for damages or losses. In this type of agreement, one party agrees to pay for potential losses or damages caused by another party. A typical example is an insur...