Indemnity Insurance is a form of health coverage where the insurance company providing the policy pays a fixed sum for a covered medical event regardless of the actual expense to treat that event. Typically the payment is made directly to the insurance enrollee rather than to a doctor (or other healthcare provider). Indemnity insurance is not major medical coverage. Indemnity insurance is sometimes used to protect against the problem of lost income during a period of injury or serious illness.
Indemnity insurance within health benefits is a completely different product than indemnity insurance in a professional context. In this latter context, indemnity insurance may refer to “errors & omissions” coverage.