An indemnity payment is not available for every insurance policy, but it can help a business avoid liability in certain instances. This common contractual agreement considers factors and variables that differ between each policy. Understanding indemnity clauses can help you ensure you have the right coverage for your business.
As seen on www.fgib.com, most insurance policies include an indemnity clause standard. However, each agreement specifies exactly what that clause covers. The length of time the payment is valid is specified by the indemnity clause. Under the agreement, the indemnity is paid should one party not meet the agreed-upon stipulations outlined in the contract.
The payments can be paid in a variety of ways. For example, a business destroyed by fire may receive a cash payment from the insurance company. Or, the insurance company may pay to have the building repaired for a small localized burn. The situation of the claim affects how the payments are made.
Indemnity clauses are common in a variety of insurance policies even if the coverage varies. Professionals with malpractice insurance may see an indemnity clause on their policy or opt to include one.
With lawsuits common against businesses, an indemnity payment is one more way a business can protect itself. Read the policy or talk to an agent for the specific coverage of the clause.