The insurance is the protection given to an individual against any financial loss or injury. In the insurance indemnity when a person causes any harm or injury to any other person then the first party is considered to be liable for the financial or any physical loss. The first party has thus to give compensation to the third party. The insurance indemnity in that case protects by providing the compensation.
The compensation covers the financial coverage either by a payment, repairing or replacement.
The indemnity insurance is of two types – personal indemnity insurance and professional indemnity insurance. The personal insurance can be defined with an example – if someone has taken responsibility to take care of any individual’s property then if any damage is caused to the property, then the care taker will be supposed to provide compensation. However, if the care-taker gets harmed because of some defect already present in the concerned product or land and the person has already complained about it to the owner. Then the owner has to pay the costs for injury because it is his responsibility to pay for loss. Thus the personal insurance is related to the person and his family.
The professional indemnity arises if damage has occurred due to any advice given to the client. This insurance is much essential for all the professions like financial advisor, medical, architecture and beauty. It protects one from all the legal charges that occur because of false advice given to the customers in the business. The insurance indemnity will protect any person or business from legal and financial expenses in case any damage is done to them.
By Alexis Dean