Indemnity legal definition

What is the definition of indemnity? What does indemnification mean on a home title? Frequently confused with guarantee, an indemnity is a primary obligation that is enforceable irrespective of whether the beneficiary could sue the person responsible for causing the loss. In its widest sense, indemnity means recompense for a loss or liability.

Some indemnity claims arise by operation of law. An indemnity contract arises when one individual takes on the obligation to pay for any loss or damage that has been or might be incurred by another individual.

The right to indemnity and the duty to indemnify ordinarily stem from a contractual agreement, which generally protects against liability, loss, or damage. When you buy insurance and your insurance protects you from being sued or from financial loss, this is an example of indemnity. YourDictionary definition and usage example. The duty to indemnify is usually, but not always, coextensive with the contractual duty to hold harmless or save harmless.

In contrast, a guarantee is an obligation of one party assuring the other party that guarantor will perform the promise of the third party if it defaults. Indemnity is considered to be. Insurance companies indemnify their policyholders against damage caused by such things as fire, theft, and flooding, which are specified by the terms of the contract between the company and the insured.

We are authorised and regulated by the Solicitors Regulation. They had failed to take out full indemnity cover.

The government paid the family an indemnity for the missing pictures. 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. It is an agreement whereby one party agrees to secure another against an anticipated loss or damage.

To indemnify means to compensate another party for losses or damages that have occurre or which may occur in the future. It is a common practice for one party to guarantee it will compensate another party for any loss that may occur due to a contractual obligation. To explore this concept, consider the indemnify definition.

The term comes from a late Middle English word meaning unhurt, free from loss. The principles described in the terms indemnity and indemnify are interrelated so these terms are defined and explained together. Professional indemnity insurance, often referred to as professional liability insurance or PI insurance, covers legal costs and expenses incurred in your defence, as well as any damages or costs that may be awarde if you are alleged to have provided inadequate advice, services or designs that cause your client to lose money.

Example of a claim. A brief overview of when to provide an indemnity covenant in a transfer of freehold or leasehold property. Free Practical Law trial To access this resource, for a free trial of Practical Law. In the context of recovery of costs in litigation, where, under Civil Procedure Rule 44. A note on indemnity clauses in commercial contracts, focusing on the law and commercial needs that shape their drafting.

It also suggests an approach to negotiating and drafting an indemnity clause, and the rules of interpretation as they apply to indemnities, with particular reference to words and phrases commonly used in indemnity clauses. It is a primary obligation because it is independent of the obligation of a third party (principal) to the beneficiary of the indemnity (beneficiary) under which the loss arose. For more information on indemnities, see Practice note, Contracts: indemnities.

An indemnity is simply a requirement to reimburse the wronged party for specified loss (which may or may not arise from a breach of contract). Liability for breach of a warranty will generally be limited to the damages available for breach of contract, which is to put the wronged party in the same position as if the warranty had been observed. The party who pays the loss is called a guarantor. Counter indemnity agreements allow a guarantor to seek reimbursement in the event they have to pay a claim for any part of the guarantee amount they must pay in the event of a default in the primary agreement.

The primary difference is that with indemnity insurance, there is no “profit” so to speak. Non-indemnity insurance tends to cover things with no real replacement value.