Definition - What does Indemnify mean?
To indemnify is to make a payment to another to reimburse a loss. Insurance companies indemnify policyholders for covered losses. Guaranteed indemnification of covered losses is a basic principle of insurance, and it is the main reason why people buy insurance for various risks.
Insuranceopedia explains Indemnify
Individuals, families, organizations, and businesses all commonly purchase insurance to have various potential losses indemnified. Sometimes, insurers only indemnify a partial amount of the loss or only cover losses after the policyholder has paid a deductible. However, it is also common for insurers to indemnify full losses.
Insurance contracts commonly have "indemnity clauses." They state exactly which perils are covered and for how much. If applicable to the type of policy, they also state the "indemnity period," which is the length of time the insurer will pay out a benefit for a covered loss,