Indemnity is a term used in contract law and insurance that refers to compensation for damage or loss. In contract law, it is a contractual obligation of one party (the indemnitor) to compensate the loss incurred by another party (the indemnitee) due to the relevant acts of the indemnitor or any other party. In insurance, indemnity is a comprehensive form of insurance compensation for damages or loss.

Indemnity is a contractual agreement between two parties in which one party agrees to pay for potential losses or damage caused by another party. It is common in agreements between an individual and a business, but it can also apply on a larger scale to relationships between businesses and government or between governments of two or more countries. Indemnity clauses can be complicated to negotiate and can lead to increased costs of services because of the increased risk of the contract.

Indemnity is distinct from damages, which is the promise of a third party to honor the obligation of a party to a contract should that party be unable or unwilling to do so. Indemnity is also distinct from a guarantee, which is the promise of a third party to honor the obligation of a party to a contract should that party be unable or unwilling to do so, usually limited to an obligation to pay a debt.

Indemnity insurance is a type of insurance policy that compensates an insured party for certain unexpected damages or losses up to a certain limit. It is designed to protect professionals and business owners when found to be at fault for a specific event such as misjudgment. Indemnity insurance is a supplemental form of liability insurance specific to certain professionals or service providers.

In summary, indemnity is a contractual obligation of one party to compensate the loss incurred by another party due to the relevant acts of the indemnitor or any other party. It is a comprehensive form of insurance compensation for damages or loss.