Glossary

Incurred losses refer to the total amount of paid claims and loss reserves associated with a particular time period, usually a policy year.

The incurred loss ratio is the ratio of losses paid and reserved (i.e., incurred) to premiums earned.

Incurred loss retro is an insurance risk financing plan under which the insured pays a premium based on actual loss experience incurred during the policy period.

Indemnification can mean that in policies written on an indemnification basis, the insurer reimburses the insured for claims and claim costs already paid by the insured.

To indemnify is to make compensation to an entity, person, or insured for incurred injury, loss, or damage.

The indemnitee is the person or organization that is held harmless in a contract (by the indemnitor).

The indemnitor is the person or organization that holds another (the indemnitee) harmless in a contract.

Indemnity is compensation to a party for a loss or damage that has already occurred or to guarantee through a contractual clause to repay another party for loss or damage that might occur in the future. The concept of indemnity is based on a contractual agreement made between two parties in which one party (the indemnitor) agrees to pay for potential losses or damages caused by the other party (the indemnitee).

An indemnity bond is a bond indemnifying an obligee against loss that arises as a result of a failure on the part of a principal to perform as required.

An indemnity contract is an agreement to pay on behalf of another party under specified circumstances.