verb (used with object), in·dem·ni·fied, in·dem·ni·fy·ing. to compensate for damage or loss sustained, expense incurred, etc. to guard or secure against anticipated loss; give security against (future damage or liability).
Beside this, what does it mean to have indemnification?
If you are the indemnified party, an indemnification clause is simply a promise by the other party to cover your losses if they do something that causes you harm or causes a third party to sue you. Indemnify and hold harmless mean the same thing — to make whole after causing a loss.
Also, what does full indemnification mean? Indemnification means one party agrees to pay losses incurred by another to a third party. In most cases, the requirement to indemnify must be contained in a written contract between the parties. However, in some states parties may be required to pay for the losses of another in certain limited circumstances.
Simply so, how do you use the word indemnify?
indemnify Sentence Examples. He is bound to warrant the lessee against, and to indemnify him for, any loss arising from any faults or defects in the thing hired which prevent its use, even though he was not aware of them at the time of the lease (Art.
What does Indemnitor mean?
An indemnitor is a company or person agreeing to take on the obligation that would typically be placed on a surety if an individual defaults on a bond issued to him. If the applicant doesn’t qualify for reasons of risk by the standards of the surety, an indemnitor might be necessary for the bond process.
17 Related Question Answers Found
How does indemnification work?
An indemnification provision allocates the risk and expense in the event of a breach, default, or misconduct by one of the parties. An indemnification provision, also known as a hold harmless provision, is a clause used in contracts to shift potential costs from one party to the other.
How does a hold harmless agreement work?
A Hold Harmless Agreement is a legal agreement that states that one party will not hold another party liable for risk, often physical risk or damage. The Hold Harmless Clause can be one-way (unilateral) or two-way (reciprocal) agreements and can be signed before or after an activity takes place.
What do you look for in an indemnification clause?
An Indemnity Clause Must be Fair It is fair when parties agree to indemnify the other party for damage, harms or liability associated with: Their breach of the contract. Their negligence. Their tortious conduct (i.e. crimes or intentional acts that cause harm to the other party)
What happens when you indemnify someone?
To indemnify someone is to absolve that person from responsibility for damage or loss arising from a transaction. Indemnification is the act of not being held liable for or being protected from harm, loss, or damages, by shifting the liability to another party.
What is the difference between limitation of liability and indemnification?
In general, insurance transfers risk from the contracting parties to a third party—an insurance company. Indemnification usually transfers risk between the parties to the contract. Limitation of liability prevents or limits the transfer of risk between the parties. Then think about who should bear each of those risks.
What is the purpose of an indemnity?
THE PURPOSE OF THE INDEMNITY CLAUSE In an indemnity clause, one party agrees to defend the other and pay for all costs of the lawsuit if it is sued by a third party for specified reasons and to pay any damages and judgment resulting from the lawsuit.
Why do you need an indemnity clause?
Indemnity clauses are used to manage the risks associated with a contract, because they enable one party to be protected against the liability arising from the actions of another party. The retailer may fear that, if the products are defective, it will be exposed to product liability claims by consumers.
Who is the third party in an accident?
The term ‘third party’ refers to a person involved with a car insurance claim who is not you – (the holder of the policy or the driver). So this is usually the other driver involved in an accident.
What does it mean to indemnify and hold harmless?
It defines hold harmless as follows: “To absolve (another party) from any responsibility for damage or other liability arising from the transaction; INDEMNIFY.” (It defines indemnify as follows: “To reimburse (another) for a loss suffered because of a third party’s or one’s own act or default.
What is indemnity in law?
Indemnity means compensation in money or property for a loss suffered. It also means a contract to save another from the legal consequences of the conduct of one of the parties or of a third person. It is an agreement whereby one party agrees to secure another against an anticipated loss or damage.
What is indemnity contract?
Indemnity is considered to be a contractual agreement between two parties whereby one party agrees to pay for potential losses or damages caused by another party. With indemnity, the insurer indemnifies the policyholder—that is, promises to make whole the individual or business for any covered loss.
Shall indemnify meaning?
“Hereby Indemnifies” and “Shall Indemnify” Posted on October 24, 2006 by Ken Adams. In my recent post on hold harmless I quoted the Black’s Law Dictionary definition of indemnify: “1. To reimburse (another) for a loss suffered because of a third party’s or one’s own act or default.
What is the difference between insurance and indemnity?
An insurance policy transfers a risk from one party to another in exchange for payment. It guards the insured party against any losses for the insured risk. If you agree to an indemnity clause, it’s a good idea to investigate if there is insurance coverage available for the risks likely to be covered by the clause.
What is indemnity with example?
Indemnity is compensation paid by one party to another to cover damages, injury or losses. An example of an indemnity would be an insurance contract, where the insurer agrees to compensate for any damages that the entity protected by the insurer experiences.
What are the principles of indemnity?
The principle of indemnity asserts that on the happening of a loss the insured shall be put back into the same financial position as he used to occupy immediately before the loss. In other words, the insured shall get neither more nor less than the actual amount of loss sustained.
What does an indemnity insurance policy cover?
Indemnity insurance is a contractual agreement in which one party guarantees compensation for actual or potential losses or damages sustained by another party. These special insurance policies indemnify or reimburse professionals against claims made as they conduct their business.
What does on a full indemnity basis mean?
Many commercial agreements contain clauses stating that one party is required to indemnify the other part for legal costs in the event of a breach of contract. A clause requiring payment of costs on a “full indemnity basis” such as that set out above appears to get around this limitation on full costs recovery.