Indemnity Limits

Indemnity limits refer to the maximum amount an insurance policy will pay for a covered claim. It serves as a cap on the insurer’s financial responsibility, ensuring they won't pay more than this predetermined amount, regardless of the actual damages or costs incurred. These limits help both parties understand the extent of coverage and manage risk. For example, if your policy has a $500,000 limit, the insurer will pay up to that amount for a claim, but any amount exceeding it would be your responsibility. Indemnity limits are crucial for assessing the adequacy of your coverage in risk management.