indemnity (2024)

FAQs

What does indemnity mean in simple terms? ›

To indemnify, also known as indemnity or indemnification, means compensating a person for damages or losses they have incurred or will incur related to a specified accident, incident, or event.

Indemnification is a legal agreement by one party to hold another party blameless – not liable – for potential losses or damages. It is similar to a liability waiver but is usually more specific, applicable only to particular items, circ*mstances, or situations, or in regard to a particular contract.

Indemnity insurance is a type of insurance policy where the insurance company guarantees compensation for losses or damages sustained by a policyholder. Indemnity insurance is designed to protect professionals and business owners when found to be at fault for a specific event such as misjudgment.

Frequently Asked Questions. What is an Indemnity Claim? Indemnity Claims are the method by which a payer can claim their payment back under the Direct Debit Guarantee. The bank is obliged to offer an immediate refund in the event that a Direct Debit has been taken in error or without authority.

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.

There's nothing inherently wrong with having an indemnity that can apply to claims between the parties—if that's what the parties intend. But if the parties want the indemnity to apply only to third-party claims, they can say so in the contract.

An indemnification provision serves as a contractual remedy to redress a party's (or third party's) financial loss suffered as a result of a claim, breach, or some other event or condition set forth in the provision. Indemnification serves as a risk allocation mechanism derived originally from insurance law.

Some common synonyms of indemnify are compensate, pay, recompense, reimburse, remunerate, repay, and satisfy. While all these words mean "to give money or its equivalent in return for something," indemnify implies making good a loss suffered through accident, disaster, warfare.

Indemnification is protection against loss or damage. When a contract is breached, the parties look to its indemnity clause to determine the compensation due to the aggrieved party by the nonperformer. The point is to restore the damaged party to where they would have been if not for the nonperformance.

It can be a cheaper and quicker alternative to investigating the risk further. In most cases, it will be you, as the seller of the property, who pays the insurance premium.

Who is entitled to indemnity? ›

Indemnity “is the right of a person, who has been compelled to pay what another should have paid, to require complete reimbursem*nt.” An indemnity may be express or implied.

What is Indemnity? The word indemnity means security or protection against a financial liability. It typically occurs in the form of a contractual agreement made between parties in which one party agrees to pay for losses or damages suffered by the other party.

A primary example is a contract providing that each party shall indemnify the other parties for losses caused by their own breach of contract. An owner and contractor in a construction contract would also often seek mutual indemnity for construction defects or other damages.

Indemnity payments are (1) losses paid or expected to be paid directly to an insured by an insurer for first-party (e.g., property) coverages or on behalf of an insured for third-party (e.g., liability) coverages, or (2) payments made by the indemnitor under a hold harmless clause on behalf of the indemnitee.

2. Right to Indemnity: As per section 145, in every contract of guarantee there is an implied promise by the principal debtor to indemnify the surety; and the surety is entitled to recover from the the principal debtor whatever sum he has rightfully paid under the guarantee but no sums which he has paid wrong fully.

plural indemnities. 1. : protection from loss, damage, or injury : insurance. 2. : freedom from penalty for past offenses.

What is Principle of Indemnity? The principle of indemnity governs that an insurance contract compensates you for any damage, loss or injury caused only to the extent of the loss incurred. Insurance contract ensures that the insurer does not make a profit in the event of an incurred loss.

The government paid the family an indemnity for the missing pictures. In case of loss of the vessel, the ship owner receives no indemnity for loss, but acquires immunity from payment of the loan.