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Types of indemnity insurance and coverages

The common concept about the insurance is that there are almost three types of insurances: Life insurance, health insurance and property insurance. But in fact this is not the truth. The field of insurance is a very broad field and its getting broader and broader with each passing day. Now even you can get yourself insured for the liability in case you get held due to any sort of legal offense. Indemnity insurance also known as liability insurance is the insurance that protects the employees or business organizations from the liability in case of any legal offense, corporate crime or negligence on behalf of a client.

What is indemnity insurance?

Indemnity insurance is the type of a contract that takes place between the insurance company and the insured person. In the contract the company agrees to pay for the liability damages incurred by the insured person. The insured person has to pay the premium installments to bind this contract. The procedure is similar to the person paying premium for life insurance only the insurance coverage is granted for a different reason.

Need for insurance:

This type of insurance is really common in different type of companies especially in medical field where any surgeon or doctor could be held liable for providing the wrong medical treatment. Most of the business organizations or hospitals consider it a mandatory requirement for their employees to get themselves covered under indemnity insurance. The indemnity insurance is valid for a certain time period during which if the legal offense happens, the insurance company will pay the entire or partial damages. The insurance can be renewed after the expiry time.



Most of the people getting insured for indemnity insurance are under the misconception that the insurance company only provides the damages in the case where the insured is innocent. The fact is that the insurance company is liable to provide the partial damages for you even if you are found guilty in the scenario.


There are three different types of indemnity insurance:

  • Malpractice insurance
  • Errors & omissions insurance
  • Deferred compensation insurance

Malpractice insurance is very common in the field of medicine where anything can go wrong in the operation theatre. Most of the business organizations and their employees tend to gain coverage under Errors & omissions insurance in order to protect themselves from the customer claims. Deferred compensation insurance is mostly asked by large business organizations so the future returns could be provided a protection.

Coverage offered:

Indemnity insurance offers coverage for several aspects such as:

  • Settlements amounts, court fees, other sorts of legal costs etc
  • Indemnity claims
  • Indemnity claims related to property negligence


The cost of indemnity insurance is mainly based on the amount agreed upon in the contract or previous indemnity claims of the insured person/organization.

Overseas coverage:

Most of the people working abroad usually remain in the fear of being held liable for anything illegal by the law of that country. If you are working in another country and want to protect yourself for indemnity claims then you can also get such coverage but first you need to get the details of such contract from your insurance agent.

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