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Insurance vocabulary · Coverage & Exclusions

Indemnity

Meaning in insurance, with examples

/ɪnˈdemnəti/nounCommon term

In insurance, indemnity means: Payment that puts the insured back in the same financial position as before the loss, no better and no worse; also the principle behind such payment.

In Turkish: tazminat, zararın tazmini, tazmin ilkesi

How it is used

A key principle of non-life insurance: nobody should profit from a loss. Used in contracts and wordings ('the insurer will indemnify the insured') and in product names such as professional indemnity insurance.

Example sentences

  1. Under the principle of indemnity, we pay the value of the old roof, not the cost of a luxury one.

  2. The contract requires the supplier to provide indemnity for any damage caused on site.

Common collocations

  • principle of indemnity
  • professional indemnity
  • indemnity limit
  • indemnify the insured
  • settlementThe final agreement on a claim and the payment that closes it, made after the insurer and the claimant accept the amount.
  • payoutThe money an insurance company pays to a customer or beneficiary after a valid claim.
  • subrogationThe insurer's right, after paying a claim, to take over the customer's legal rights and recover the money from the person who caused the loss.
  • underinsuranceA situation where the sum insured is lower than the real value of the property, so the insurer may pay only part of a loss.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Coverage & Exclusions

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This page explains English vocabulary for learners. It is not financial advice.