Definition - What does Indemnity mean?
Indemnity refers to an act of making a person completely protected from any unfavorable condition or losses that have occurred or may occur in the future. It is an agreement between two parties where one is responsible for securing another against present or future losses.
Justipedia explains Indemnity
Indemnity can also be explained as a right that guarantees a person without fault on his or her own part to pay for the damages caused by the negligence of someone else, and for which the person is only considered secondary liable. Insurance is an excellent example of indemnity. When someone files a claim and the insurance company pays it, it is not because the insurance company did something wrong. It is because they provide a form of indemnity for the insured.