Question
A contractual agreement between two parties, in which
one party agrees to pay for potential losses or damages caused by the other party, is called?Solution
Indemnity is a contractual agreement between two parties, in which one party agrees to pay for potential losses or damages caused by the other party. A typical example is an insurance contract, whereby one party (the insurer, or the indemnitor) agrees to compensate the other (the insured, or the indemnitee) for any damages or losses, in return for premiums paid by the insured to the insurer.
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