indemnity

Dictionary of Business Terms for: indemnity
indemnity
  1. obligation to make good any loss or damage another person has incurred or may incur.
  2. right that the person suffering loss or damage is entitled to claim. See also contribution.
Dictionary of Insurance Terms for: indemnity
indemnity

compensation for loss. In a property and casualty contract, the objective is to restore an insured to the same financial position after the loss that he or she was in prior to the loss. But the insured should not be able to profit by damage or destruction of property, nor should the insured be in a worse financial position after a loss.

In hospital indemnity and other health insurance plans, coordination of benefits is designed so that the insured cannot profit from an illness.

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