Indemnity Period

Updated: 09 June 2023

What Does Indemnity Period Mean?

An indemnity period is a specified amount of time during which an insured can receive benefits from an insurance policy. It is commonly found in disability and business interruption insurance. This is because these policies limit the benefit period after a covered loss has occurred. Following the end of the indemnity period, benefits can no longer be claimed, even if the policyholder is still experiencing the loss, i.e., a disability or business interruption.

An indemnity period is also called a period of indemnity.

Insuranceopedia Explains Indemnity Period

Disability and business interruption policies compensate the policyholder up to a certain amount for a specified length of time, or indemnity period, which vary from policy to policy. The limit on the duration of benefit payments encourages the policyholder to take steps to recover, whether physically in the context of a disability or financially in the context of business interruption. Moreover, it also circumscribes the amount an insurer would have to pay out to a certain limit. In doing so, it helps them remain profitable and financially sound. After all, no insurer could likely continue operating if it did not limit the benefits it pays out.


Period of indemnity

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