what is indemnity insurance 
the term indemnity insurance refers to an insurance policy that compensates an insured party for certain unexpected damages or losses up to a certain limit usually the amount of the loss itself insurance companies provide coverage in exchange for premiums paid by the insured parties these policies are commonly designed to protect professionals and business owners when they are found to be at fault for a specific event such as misjudgment or malpractice they generally take the form of a letter of indemnity investopedia nono flores