Definition of 'Indemnity Insurance'
An insurance policy that aims to protect business owners and employees when they are found to be at fault for a specific event such as misjudgment. Typical examples of indemnity insurance include professional insurance policies such as malpractice insurance, and errors and omissions insurance, which indemnify professionals against claims made in the workplace.
Investopedia explains 'Indemnity Insurance'
Errors and omissions insurance is commonly sought (and often required) in financial industries, while deferred compensation indemnity insurance has become popular as a way for company executives to protect future money owed to them, even if the company has filed for bankruptcy.
Health indemnity insurance is sometimes used when a person is in between health plans, and will cover some (but not all) expenses.