What Is an Indemnity Benefit Contract?
“This is John Pinelli, financial representative, talking to you today about indemnity benefit contract. Now, an indemnity benefit contract is essentially an insurance contract where one party agrees to pay another party when a loss occurs. So, when that loss occurs by party A, party B has an agreement to come in and indemnify or reimburse party A for that loss when it occurs. So, an indemnity benefit contract is essentially an insurance contract, although it doesn’t always have to pass through an insurance company. For example, my friend is about to leave my house and he says hey John, can I borrow your car? And I say, oh I don’t know, and he says, well, if I damage your car I’ll agree to pay for all the damages.
