in·dem·ni·ty / inˈdemnitē/ • n. (pl. -ties) security or protection against a loss or other financial burden: no indemnity will be given for loss of cash. ∎ security against or exemption from legal responsibility for one's actions: a deed of indemnity | even warranties and indemnities do not provide complete protection. ∎ a sum of money paid as compensation, esp. a sum exacted by a victor in war as one condition of peace.
Recompense for loss, damage, or injuries; restitution or reimbursement.
An indemnity contract arises when one individual takes on the obligation to pay for any loss or damage that has been or might be incurred by another individual. The right to indemnity and the duty to indemnify ordinarily stem from a contractual agreement, which generally protects against liability, loss, or damage.