indemnity

  

Definition

Undertaking given to compensate for (or to provide protection against) injury, loss, incurred penalties, or from a contingent liability. A shipping company, for example, will ask for a bank's indemnity for releasing a shipment to a consignee who has lost original shipping documents. The bank in turn will require the consignee to sign a counter-indemnity before issuing its indemnity to the shipping company. This way the consignee gets the release of shipment in completion of a transaction, and both the shipping company and the bank are protected in case some dispute arises out of that transaction. See also letter of indemnity.

Use indemnity in a sentence

  • Due to the tricky nature of transporting the world's most expensive diamond, indemnity was given to the truck company that was transporting the diamond because the truck route involved a very dangerous area of the country.

    Was this Helpful?   (25)   (0)
  • Since the new cars were coming in that afternoon, Arthur stopped by the bank to see what sort of indemnity could be arranged to protect the dealership completely.

    Was this Helpful?   (25)   (0)
  • The transport company asked for indemnity regarding shipping of a package to a customer who has lost the receipt documents.

    Was this Helpful?   (25)   (0)
Show more usage examples...

Related Videos




http://www.businessdictionary.com/definition/indemnity.html

Have a question about indemnity? Ask for help in the
Community
Browse by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z