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What is the difference between indemnity and insurance?
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Indemnity is when one party agrees to reimburse another for any losses that may occur due to an event or circumstance. Insurance is a product that provides a financial benefit to a person or organization if the predetermined event occurs. With indemnity, there is no cost to the insured party except that which is already determined from the agreement between parties. With insurance, there is an associated cost for the product, and the cost is based upon the insured's circumstances and risk factors.