Definition - What does Indemnification mean?
The term indemnification can be defined in simple terms as the act of compensating a party for damage or a loss that occurred. It is an act that provides a guarantee to a party to cover a future loss or damage. One common example of Indemnification is when an insurance company pays for the damages to a property that was covered by the insurance company.
Justipedia explains Indemnification
Another example of indemnification is typically seen when a subcontractor agrees to indemnify a general contractor for losses or damages that may occur due to the work of the subcontractor. This includes physical injury to any worker or breach of contract.
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