How do I Make an Indemnity Claim?

“Indemnity” is a legal term that means, very simply, reimbursement. There are several situations that give rise to an indemnity claim in law. In tort law, which typically deals with personal injury, often one party may be held liable for the harm to another but the circumstances may dictate that he or she has a right to indemnification from a third party. Contracts often contain indemnity clauses, which amount to a promise of one party to reimburse the other in certain scenarios. The process by which you would make an indemnity claim depends on the source of the right of indemnification, but it typically can be made through an action for indemnification against the party from whom you are seeking reimbursement.

Making an indemnity claim is common in a tort case dealing with personal injury. If two parties are held to be jointly and severally liable — i.e., each party committed a negligent action that contributed to the injury of the plaintiff one way or another — then the plaintiff will typically be able to recover the entirety of his or her monetary damages from any party. The defendant who is forced to pay the plaintiff the entirety of the damages may then file an indemnity claim against the other party for reimbursement amounting to the proportion of fault that other party had for the plaintiff’s injury.

For example, a plaintiff may be injured in a car accident where two people were at fault, one 60% and the other 40%. The plaintiff may file a negligence action against the 60%-at-fault party. When he or she wins the lawsuit and collects the full amount of monetary damages from that one party, it is then said that the plaintiff is “satisfied” and cannot bring a separate action against the 40%-at-fault party. However, that party who was 60% at fault may then seek indemnity from the party who was 40% at fault amounting to 40% of the total he or she paid to the plaintiff.

Indemnification clauses are common in contracts where one party agrees to reimburse the other if certain events or costs arise. For instance, two companies partnering together to provide a service my agree to indemnify each other 50% of any legal fees and damages paid in the event a lawsuit arises from the service they are providing together. An indemnity claim is also commonly referenced in the context of insurance law. When an insurance company reimburses a policy holder for damages that his or her insurance policy covers, it is called indemnification.

The process for making an indemnity claim depends on the circumstances under which the right to reimbursement arose. In the event the issue is one that is covered by an insurance policy, then you can make an indemnity claim by filling out the appropriate paperwork and submitting it to the company. If the indemnity claim arises out of the personal injury scenario described above, it may be more difficult. In the event a request does not convince the other liable party of the need to reimburse you for his or her share of fault, you will have to file an action for indemnification in the jurisdiction in which the accident happened.