Indemnity, means the protection against damage of loss.
In Insurance, a contract of indemnity is intended to provide financial compensation for a loss which the Insured suffers, and “restore” them back to the financial situation prior to the event which lead to the loss/damage.
The Insured is expected to be compensated for the full loss and nothing more, meaning the Insured should not make a profit from the loss.
Contracts of Indemnity are usually applied for the following classes of Insurance:
- Property
- Liability
- Pecuniary
- Marine
Where a value can be placed on the subject-matter unlike Life Insurance.
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