indemnity

law

Written by

The Information Architects of Encyclopaedia Britannica

Last updated

June 29, 2026

Quick Summary

Indemnity, in a legal context, refers to a payment made to another party for a loss or injury they have sustained. This concept is fundamental in insurance contracts, where it ensures that an insured person can recover no more than their actual financial loss. For instance, if a fire insurance policy covers a loss, the insurer may seek to recover that amount from a third party responsible for the fire.123

The principle of indemnity prevents individuals from profiting from a loss by claiming compensation from multiple sources that exceeds the actual value of the damaged property. Related terms include compensation, damages, and restitution, all of which involve providing a just payment for harm or injury.3142

Summary created from Britannica articles using AI. AI can make mistakes, so verify using Britannica articles.

6 Britannica Sources

Ask Britannica AI about this topic

Britannica doesn't have a full article on this topic, so we've curated a list of our relevant coverage.

insurance
Warranties
…contract law, the principle of indemnity. Under the principle of indemnity a person may recover no more than the actual cash loss; one may not, for example, recover in full from two separate policies if the total amount exceeds the true value of the property insured.
Read More
…contract law, the principle of indemnity. Under the principle of indemnity a person may recover no more than the actual cash loss; one may not, for example, recover in full from two separate policies if the total amount exceeds the true value of the property insured.
Read More