Definition
- When one party agrees to compensate another for harm, loss, or liability they may incur.
Examples
- An employer may choose to indemnify an employee in certain professions like medicine, law or security, to protect the employee from financial loss or legal responsibility.
- An insurance company insures the contract holder against covered losses.
- Contracts: One party agrees to hold harmless the other in case of lawsuits or damages (e.g., service providers indemnify clients).