Difference Between Indemnity and Compensation

Indemnity refers to a form of exemption from and/or security against certain losses, liabilities or penalties. ... Compensation is a form of relief given to an injured party while Indemnity is a form of immunity protecting a party from liability or legal action.

1. What is the difference between indemnity and damages?
2. What is indemnity example?
3. Is indemnity the same as insurance?
4. What is the difference between indemnity and guarantee?
5. What are the types of indemnity?
6. Should I sign an indemnity agreement?
7. How does an indemnity work?
8. What is another word for indemnity?
9. What is the purpose of an indemnity?
10. Do I need an indemnity policy?
11. Why do I need indemnity insurance?
12. What does an indemnity policy cover?

What is the difference between indemnity and damages?

On a like for like basis, an indemnity better than an award of common law damages, whether its for a breach of warranty or not. When an indemnity covers the same loss as a damages claim, indemnities almost invariably give rise to a claim which is higher in amount than the breach of warranty claim.

What is indemnity example?

Indemnity is commonly included as a clause in contracts in which the actions or mistakes of one party may result in the other party being liable for damages. For example: ... In doing this, the hospital indemnifies the wheelchair company, or the hospital guarantees indemnity for any losses or injuries that may occur.

Is indemnity the same as insurance?

The main difference between indemnification and insurance is that the former represents the process of transferring loss responsibility within a contractual relationship, and can exist independent of a policy, while the latter represents the actual contract backed by an insurance company.

What is the difference between indemnity and guarantee?

Indemnity is when one party promises to compensate the loss occurred to the other party, due to the act of the promisor or any other party. On the other hand, the guarantee is when a person assures the other party that he/she will perform the promise or fulfill the obligation of the third party, in case he/she default.

What are the types of indemnity?

Types of Indemnity

• Broad Indemnification. The Promisor promises to indemnify the Promisee against the negligence of all parties, including third parties, even if the third party is solely at fault.
• Intermediate Indemnification. ...
• Limited Indemnification.

Should I sign an indemnity agreement?

It's still your business decision whether you sign them or not, but you should do so only where it is a critical contract that you have no way of modifying or negotiating changes. In contrast, the best kind of Indemnity Agreement is commonly called a Mutual Indemnity Agreement or a Mutual Hold Harmless Provision.

How does an indemnity work?

An indemnity is a promise by one party to compensate another for the loss suffered as a consequence of a specific event, called the 'trigger event'. The trigger event can be anything defined by the parties, including: a breach of contract. a party's fault or negligence.

What is another word for indemnity?

Some common synonyms of indemnify are compensate, pay, recompense, reimburse, remunerate, repay, and satisfy. While all these words mean "to give money or its equivalent in return for something," indemnify implies making good a loss suffered through accident, disaster, warfare.

What is the purpose of an indemnity?

Indemnity is a comprehensive form of insurance compensation for damages or loss. In this type of arrangement, one party agrees to pay for potential losses or damages caused by another party.

Do I need an indemnity policy?

If there is a risk against which the solicitor believes the purchaser should be protected, one way of minimising the risk is to obtain an indemnity policy. It can be a cheaper and quicker alternative to investigating the risk further.

Why do I need indemnity insurance?

Professional Indemnity Insurance provides cover for legal costs and expenses incurred in your defence, as well as any damages or costs that may be awarded, if you're alleged to have provided inadequate advice, services or designs that cause your client to lose money.

What does an indemnity policy cover?

Indemnity insurance is used during conveyancing transactions to cover a legal defect with the property that can't be resolved swiftly, or at all. ... Legal indemnity insurance covers the buyer and the mortgage lender in the event of any loss of value on the property as a result of the defect.