what is indemnity 
indemnity is a comprehensive form of insurance compensation for damage or loss when the term indemnity is used in the legal sense it may also refer to an exemption from liability for damage indemnity is a contractual agreement between two parties in this arrangement one party agrees to pay for potential losses or damage a typical example is an insurance contract in which the insurer or the indemnitor agrees to compensate the other the insured or the indemnitee for any damage or losses in return for premiums paid by the insured to the insurer with indemnity the insurer indemnifies the policyholder that is promises to make whole the individual or business for any covered loss investopedia laura porter