Indemnity

Indemnity is a legal concept where one party agrees to compensate another for certain losses or damages they might incur. This typically occurs in insurance or contracts, where, for example, if you damage someone's property and are found liable, your insurance policy may cover the costs. Essentially, it serves as a financial safety net, ensuring that the party suffering the loss does not bear the full burden of that loss, while the indemnifying party provides protection or reimbursement. This arrangement helps to manage risks and financial stability for individuals and businesses alike.