Indemnity

Indemnity definition

/ɪnˈdɛmnɪti/

What does Indemnity mean?

An indemnity is an agreement by one party (the indemnifying party) to bear the cost of certain losses or liabilities incurred by another party (the indemnified party) in certain circumstances. An indemnity will typically give rise to a right to an on demand payment without the need to prove a breach of contract.

Indemnity explained

Provided that an indemnity relates to a specific loss it will not be subject to the usual legal rules on causation, remoteness of damage and the requirement to mitigate loss. A contractual indemnity clause should specify which losses and liabilities will be covered by the indemnifying party and in which circumstances.

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