Which type of insurance is specifically focused on indemnifying loss?

• A. Liability Insurance
• B. Property Insurance
• C. Indemnity Insurance
• D. Health Insurance

Answer: (C)

Indemnity Insurance is specifically designed to provide financial compensation or reimbursement for losses incurred by the insured. The core principle of indemnity is to restore the insured to the same financial position they were in prior to the loss, without allowing for profit from the insurance claim. This type of insurance plays a critical role in risk management by ensuring that individuals or businesses can recover from unexpected losses without suffering additional financial hardship.

While other types of insurance, such as Liability, Property, and Health Insurance, may also provide some level of coverage that aligns with indemnification, they are structured around specific scenarios. Liability Insurance protects against claims for damages to others, Property Insurance covers physical damage to an insured's assets, and Health Insurance assists with medical expenses. Indemnity Insurance, however, is uniquely centered around the concept of directly compensating the insured for their losses, thereby making it the most relevant choice in this context.