Indemnity
Etymology
From Latin indemnitas, "security from loss," from indemnis, "unhurt, without loss" (in-, "not," + damnum, "damage, loss" — also the root of "damage" and "condemn"). The literal meaning is a state of suffering no loss. Contract law uses it for the promise that keeps one party in exactly that state by shifting a loss onto another.
noun · /in-DEM-nih-tee/
A commitment to compensate someone for a loss or to protect them from a legal liability.
What it names
The clause in a contract where one side promises to cover the other’s costs if a certain kind of trouble arises.
Example
The supplier demanded an indemnity clause so it would not be sued for how customers misused the parts.
Related idea
Indemnity shifts a defined loss to another party by agreement; liability is the underlying responsibility that indemnity is meant to absorb.