Definition
A promise, obligation, or right by which one party (the indemnitor) agrees to protect another (the indemnitee) from specified losses, liabilities, or legal consequences — either by preventing the harm from occurring or by making the indemnitee whole after it occurs.
The term operates on two distinct levels that researchers must keep separate:
1. CONTRACTUAL INDEMNITY. A collateral agreement by which one party undertakes to hold another harmless from loss arising out of a particular act, transaction, or legal exposure. The classic form: A agrees to do something risky at B's request, and B promises to cover any resulting loss. This is indemnity as a forward-looking obligation — a shield against anticipated harm.
2. INDEMNITY AS A REMEDY OR RIGHT. Once loss has occurred, indemnity describes the right of a party who has been compelled to pay damages to shift that loss entirely onto the party who was primarily responsible. This distinguishes indemnity from contribution, which involves apportioning shared liability among parties equally at fault. Indemnity is all-or-nothing; contribution divides.
3. INDEMNITY IN INSURANCE. The foundational principle of insurance law: when a covered loss occurs, the insured should be restored to the financial position they occupied before the loss — no more, no less. This prevents the insurance contract from becoming a vehicle for profit.
4. PUBLIC OR GOVERNMENTAL INDEMNITY. In constitutional and public law contexts, indemnity refers to compensation owed by the government to a private owner whose property is taken or damaged for public use. This meaning connects directly to eminent domain and just compensation doctrine.
---
Common Language
Modern common usage (Wiktionary): Security from damage, loss, or penalty; repayment or compensation for loss or injury; an obligation to incur the losses of another.
Historical common usage (Webster's 1913): Security, insurance, or exemption from loss or damage, past or to come; immunity from penalty or punishment; also, amnesty.
The gap worth noting: In ordinary usage, "indemnity" shades toward compensation already paid — a backward-looking settlement for harm done. In law, contractual indemnity is primarily forward-looking: it is a promise made before harm occurs, not a payment after the fact. Researchers working with historical sources will also encounter "indemnity" in the sense of political amnesty or legislative immunity from prosecution — a usage that has largely disappeared from modern legal practice but appears frequently in 19th-century sources.
---
Common Confusion
INDEMNITY vs. CONTRIBUTION. These are frequently conflated because both arise when one party pays more than their share of a shared liability. They are not the same. Indemnity shifts the entire loss from one party to another — it is appropriate where one party is only secondarily or vicariously liable and the other is the primary wrongdoer. Contribution divides a shared loss proportionally among parties who are jointly and equally at fault. A vicariously liable employer who pays a judgment may seek full indemnity from the employee whose conduct caused the harm; two joint tortfeasors equally at fault seek contribution from each other.
INDEMNITY vs. GUARANTEE. A guarantee is a promise to answer for the debt or default of a third party if that party fails to perform their own obligation. Indemnity is a promise to hold someone harmless regardless of the acts of others — the indemnitor makes the obligation their own, not merely secondary. Historical sources sometimes blur this line; the distinction matters for statute of frauds analysis, because guarantees traditionally required a writing while indemnities did not.
---
Core Elements
For contractual indemnity to be enforceable, courts generally examine:
1. SCOPE OF THE OBLIGATION. What losses, liabilities, or claims does the indemnity cover? Broad indemnity clauses (covering indemnitee's own negligence) receive heightened scrutiny and are narrowly construed in most jurisdictions.
2. TRIGGERING EVENT. What must occur to activate the obligation? Some agreements require a formal demand; others activate upon the filing of a claim; others upon actual payment of a loss.
3. NOTICE REQUIREMENTS. The indemnitee typically must give timely notice to the indemnitor of any claim that may trigger the obligation. Failure to notify can forfeit the right.
4. PRIMARY vs. SECONDARY LIABILITY. Whether indemnity is available as a remedy depends on whether the party seeking it was only secondarily liable (vicariously or technically) or was itself a direct wrongdoer.
---
Recognized Forms
/SUBTYPES
EXPRESS INDEMNITY. Created by contract, spelling out the parties' obligations. Governs the vast majority of commercial, construction, and professional services relationships.
IMPLIED INDEMNITY. Arises by operation of law from the relationship between the parties — most commonly between a vicariously liable party and the actual tortfeasor. Not dependent on a written agreement.
INDEMNITY BOND. A bond executed by an indemnitor (often with surety) guaranteeing the indemnitee against a specific loss — historically given to sheriffs, administrators, or others acting in a fiduciary capacity who faced personal exposure.
LEGISLATIVE INDEMNITY / BILL OF INDEMNITY. A statute conferring immunity on persons for past acts that were technically unlawful. A historically significant form in English and early American public law; largely obsolete in modern practice.
---
Why It Matters in Research
The single most important navigational point: "indemnity" is doing different work depending on the era, the subject matter, and whether you are reading a contract, a tort case, an insurance policy, or a constitutional text. These meanings can appear in the same document.
In historical sources, pay attention to whether indemnity is being used in the guarantee sense. Before courts clearly separated indemnity from guarantee, the statute of frauds issue was live: if a court treated an indemnity as merely a collateral promise to answer for another's debt, it could void an oral agreement. The Rapalje & Lawrence entry explicitly addresses this distinction.
In insurance law, the principle of indemnity operates as a doctrinal cap: the insured cannot recover more than their actual loss. This principle generates a large body of subrogation doctrine, because once an insurer indemnifies the insured, the insurer steps into the insured's shoes to pursue the underlying wrongdoer.
In construction and commercial contracts — the dominant context in modern practice — indemnity clauses are among the most heavily negotiated and litigated provisions. Anti-indemnity statutes in many states restrict or void clauses that require one party to indemnify another for the indemnitee's own negligence. Researchers working in this area must check the applicable state statute, not just the contract language.
In tort law, the indemnity/contribution distinction drives strategy in multi-defendant litigation. An employer defending a vicarious liability claim will often assert an indemnity cross-claim against the employee, seeking full reimbursement rather than proportional sharing.
In the corpus, the Bouvier connection to eminent domain is not incidental. Nineteenth-century constitutional discourse treated governmental compensation for takings as a species of indemnity — the state indemnifying the owner against the damage caused by public necessity. Researchers tracing the conceptual history of just compensation will find this framing in Bouvier and related sources.
---
Historical Dictionary Support
The historical dictionaries converge on a core definition: indemnity is security against anticipated loss, typically arising from a collateral promise made in connection with an act the indemnitee is asked to perform. Black's (both editions) and Rapalje & Lawrence all use the language of "collateral contract or assurance," tracking the California Civil Code formulation. This reflects the dominant 19th-century understanding: indemnity as a promise running alongside a primary transaction.
Burrill emphasizes indemnity in its insurance context more heavily than the others, capturing the principle-of-indemnity doctrine as a jurisprudential thread running through the entire law of insurance. His framing — "security against future loss or liability from any future act or occurrence" — is notably broader than the contractual definitions in Black's and is useful for researchers approaching indemnity as a remedial concept rather than a purely transactional one.
Anderson and Bouvier both gesture toward the public law dimension. Bouvier's cross-reference to eminent domain is explicit, and his observation that "in all just governments" indemnity must be given for property taken for public use reflects the natural law foundation underlying what became the Takings Clause jurisprudence.
What the historical dictionaries largely miss: the tort law indemnity/contribution distinction as a remedial doctrine, which developed substantially in 20th-century multi-party litigation. They also do not address anti-indemnity statutes, which are creatures of the modern commercial era. Researchers should not assume that 19th-century dictionary definitions of indemnity encompass the full doctrinal landscape of modern indemnity law.
---
Jurisdictional Note
Many states have enacted anti-indemnity statutes — particularly in the construction industry — that void or limit contractual provisions requiring one party to indemnify another for the indemnitee's own negligence or willful misconduct. The scope and application of these statutes vary significantly by state. Federal government contracts are also subject to separate indemnification frameworks under the Federal Acquisition Regulation.
---
Encyclopedia Cross-Reference
Torts & Personal Injury Encyclopedia: Vicarious Liability and Joint Tort Liability — Indemnity (Common Law and Contractual)
Military, Veterans & Admiralty Law Encyclopedia: Marine Insurance — Hull, Cargo, P&I, and the Principle of Indemnity
Military, Veterans & Admiralty Law Encyclopedia: VA Burial Benefits — National Cemeteries, Headstones, and Dependency and Indemnity Compensation (DIC)
---