The measures of compensating the insured, as close to the same financial condition preceding the incident, for the loss or damage that has occurred.
"To indemnify" means to compensate or reimburse someone for a loss or damage they have suffered. When an individual or entity is indemnified, they are protected against financial losses resulting from a specific event or situation. In the context of insurance, it refers to the act of providing compensation to the insured party for covered losses or damages.
When an insurance policy indemnifies the policyholder, it means the insurance company will pay out the agreed-upon amount (up to the policy limits) to the insured to cover the financial loss resulting from an insured event. The purpose of indemnification is to help the insured return to the same financial position they were in before the covered loss occurred.
For example, if a policyholder has a car insurance policy and gets into an accident, the insurance company will indemnify the policyholder by covering the cost of repairs to the vehicle, up to the policy's limits. This way, the policyholder is compensated for the financial loss they experienced due to the accident.
Indemnification can also occur in contexts outside of insurance. For instance, in contracts and legal agreements, one party may agree to indemnify another party against specific risks or liabilities. This means that if the indemnified party incurs losses or legal expenses due to certain events, the indemnifying party will cover those losses or expenses.
In summary, "to indemnify" means to provide compensation or protection against financial losses incurred by someone due to a specified event, whether in the context of insurance, contracts, or other arrangements.
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