Indemnity is protection against loss or harm — it is most often used in insurance.
If you suffer an injury or there's damage to your house, an indemnity makes up for the loss — if it's part of your insurance. An indemnity may also keep something or someone from being held responsible for harm. Protection indemnity is mainly offered for unlikely events. If you regularly crash hot-air balloons, you won’t get indemnity for the next one you rent. In fact, the balloon rental company will probably demand their own indemnity in case you crash again.