indemnity (2024)

FAQs

What do you mean by indemnity? ›

The word 'indemnity' finds its roots in the Latin word 'indemnis', which stands for 'unhurt' or 'free from loss'. Hence, indemnities are also referred to as 'hold harmless' agreements. Indemnities are contractual agreements that provide compensation for losses, damages, or liabilities sustained by another party.

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.

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.

Indemnity is a comprehensive form of insurance compensation for damages or loss. In a legal sense, it may also refer to an exemption from liability for damages. The insurer promises to make the insured party whole again for any covered loss in exchange for premiums the policyholder pays.

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.

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.

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.

In legal terms, indemnity requires a nondelivering entity to compensate the aggrieved party for losses it incurred or expects to as a result of the nonperformance.

Typically, parties make a written agreement in which one party (indemnitor) promises to indemnify the other party (indemnitee) for future specified losses. The more common form of an indemnification agreement is the insurance policy.

How to explain indemnification? ›

What is indemnification? Indemnification, also referred to as indemnity, is an undertaking by one party (the indemnifying party) to compensate the other party (the indemnified party) for certain costs and expenses, typically stemming from third-party claims.

To indemnify someone is to absorb the losses caused to that party. The real significance of an indemnity clause is to protect the indemnified party against the third party lawsuits.

a) The objective of the insurer is to put you back in the same financial condition which you were in before the loss. b) You are compensated after the insurer fully inspects and calculated the loss. The claim you receive is neither less nor more than the loss.

Appropriate cover is an indemnity arrangement which is appropriate to your role and scope of practice. It must take into account the nature and extent of the risks of practising in your role. Below we set out the likely arrangements depending on where you work.

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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.

Indemnity insurance is a protective shield against financial loss due to liabilities or damages. Whether for an individual professional, a business, or specific situations like healthcare or property rental, it's an essential part of risk management.

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.

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.