Indemnity

Besides a cool word to include in the title of a noir thriller (i.e. Double Indemnity), indemnity provides the basic concept behind insurance. The concept involves one party agreeing to cover a loss incurred by another party.

You accidently park your car in the middle of an action movie set and it gets blown up as part of one of the film's tentpole scenes. You can't afford to buy a new car. Luckily, your insurance policy provides you indemnity for the situation. They will buy a new car for you.

The indemnification inherent in insurance policies mean that the company agrees to accept the loss created by you not being able to read signs and getting your car blown up. You pay your monthly premiums. The insurance company offers indemnity. That's the deal.