Indemnity can describe compensation for a covered loss or an obligation to protect another party under a contract.
The distinction that matters
A contractual indemnity may be broader than insurance cover and should not be treated as automatically insured.
What to check
- Read the obligation and policy separately.
- Check exclusions and limits.
- Seek advice before accepting broad contract terms.
Example to discuss
A contractor checks whether a client’s indemnity clause extends beyond the liability accepted by the insurer.
This is a hypothetical comparison, not a customer claim or a determination of cover.
Sources and further reading
General information only. The policy, schedule and applicable rules determine the actual position. For a personal decision, use an appropriately qualified adviser or the relevant provider.