Type of health insurance policy in which benefits in the form of cash payments are sent to the insured instead of service benefit payments to the service provider. The contract usually lists the maximum amounts paid for each covered service. Usually, after the service provider has billed the patient, the insured individual submits proof of payment to the insurance company and is reimbursed by the company for the covered costs and makes up the balance himself.
Insurance Encyclopedia
Indemnity bond
A bond that promises to indemnify the obligee against losses stemming from the principal’s failure to perform.
Indemnity carrier
See: insurance carrier .
Indemnity Clause
A contract clause placing an obligation on one party to indemnity the other for losses incurred in the course of the contract.
Indemnity commission
Commission advanced by a life company to an intermediary on the understanding the company can clawback the whole or part of the commission if the policy lapses within a specified period of time.
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commission paid to an agent in advance but subject to the condition that it shall be repaid if the premium by reference to which it is calculated is not paid by the policy holder, for example, because the policy is allowed to lapse.
Indemnity insurance
Traditional health insurance plan, also known as fee-for-service . See fee-for-service (FFS) reimbursement .
Indemnity limit
See: maximum benefit period .
Indemnity limits
Imposed by liability (re)insurers to put a ceiling on their potential liability. Public liability insurers usually limit their liability in respectof the damages and claimant’s costs arising from any ‘one occurrence’ with no limit for the period of cover. In addition the insurer pays the insured’s own costs but some liability policies are ‘costs inclusive’. Under products liability and professional indemnity policies it is usual to impose annual aggregate limits per-occurrence limit. Some policies may contain both per-occurrence and annual limits. ‘Inner’ or ‘sublimits’ may be applied to particular forms of loss (e.g. financial loss cover). with no
Indemnity Period
The period beginning with the date of the damage during which the turnover of the business is affected by the damage. It lasts until the turnover recovers and reaches the point at which it would have been had the loss not occurred, or the expiry of the maximum indemnity period – the number of months selected by the insured – whichever comes first.
Indemnity period/the maximum indemnity period
In a business interruption insurance, it is the period beginning with the occurrence of the damage and ending not later than the end of the period stated in the policy as the maximum indemnity period, e.g. 24 months. The period reflects the time needed to restore the business to its preloss trading level and is chosen by the insured.