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Indemnity can be claimed for actions of a third party, whereas damages can only be claimed for actions of the parties to the contract.
Indemnities and guarantees are often confused. A guarantee is an agreement to meet someone else's agreement to do something ? usually to make a payment. An indemnity is an agreement to pay for a cost or reimburse a loss incurred by someone else.
The word indemnity means security or protection against a financial liability. It typically occurs in the form of a contractual agreement made between parties in which one party agrees to pay for losses or damages suffered by the other party.
In the indemnity clause, one party commits to compensate another party for any prospective loss or damage. More common is in insurance contracts, in exchange for premiums paid by the insured to the insurer, the insurer offers to compensate the insured for any potential damages or losses.
Indemnity is security or protection against contingent hurt, damage, or loss; or a legal exemption from the penalties or liabilities incurred by any course of action. Indemnification is the action of compensating for actual loss or damage sustained; the payment made with this object.
Indemnity is a type of insurance compensation paid for damage or loss. When the term is used in the legal sense, it also may refer to an exemption from liability for damage. Indemnity is a contractual agreement between two parties in which one party agrees to pay for potential losses or damage caused by another party.
An indemnity is a primary obligation; it does not depend on having to prove a breach of a contractual obligation. This offers a number of advantages over bringing a damages claim for a breach of contract: An indemnity will typically be triggered by losses being incurred, without the need to prove any "fault".
Indemnification clauses are contractual provisions that require one party (the ?Indemnitor?) to indemnify another party (the ?Indemnitee?) for losses that the Indemnitee may suffer. In prime contracts, the owner usually is the Indemnitee and the contractor is the Indemnitor.