GlossaryGeneral Principles
General PrinciplesPrinciple of Indemnity
Also known as: Indemnity
The core insurance principle stating that insurance is designed to restore the insured to approximately the same financial position held before the loss, without allowing a financial gain.
“The principle of indemnity prevents an insured from collecting more than the actual financial loss sustained, eliminating incentives to profit from insured hazards.”
Related terms