Duty to Indemnify
Key Takeaway
The insurer's obligation to pay damages, settlements, or judgments on behalf of the insured for covered claims. Unlike the duty to defend, which is determined by the allegations, the duty to indemnify depends on the actual facts and whether the loss falls within the policy's coverage terms and conditions..
Definition
The insurer's obligation to pay damages, settlements, or judgments on behalf of the insured for covered claims. Unlike the duty to defend, which is determined by the allegations, the duty to indemnify depends on the actual facts and whether the loss falls within the policy's coverage terms and conditions.
Why This Matters for Law Firms
This term defines the boundaries of what your insurance will and will not pay for. Law firms that misunderstand coverage terms risk discovering gaps in protection only after a claim has been filed, when it is too late to remedy the situation. Reviewing these terms with your broker before binding coverage is a critical risk management step.
Example Usage in Context
During a coverage review meeting, the firm administrator might note: "Our policy includes a duty to indemnify provision -- let's make sure we understand exactly what that means for our specific practice areas before we sign off on the renewal."
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