Duty to indemnify refers to an insurance company’s (insurer’s) obligation to indemnify the insured against any loss or damage when the claim(s) asserted against the insured (policyholder) may be covered by a liability insurance policy—which is a policy that may cover claims for personal injury and property damage suffered by third parties.

The duty to indemnify is one of the insurer’s primary duties under most liability insurance policies but is narrower than the duty to defend the insured. The duty to indemnify the insured generally arises at a later date when the liability of the insured is established and a review of the facts developed during the litigation or claims investigation process must be examined to determine if they fall within the insurer’s indemnification obligations under the insurance policy.

In Maine, the duty to indemnify is a legal obligation of an insurance company to cover the financial costs of a claim against the insured when such a claim is found to be within the scope of the insurance policy's coverage. This duty is typically outlined in liability insurance policies, which may include coverage for third-party personal injury and property damage claims. The duty to indemnify is activated when the insured's liability is established, often after a thorough review of the facts that have emerged during litigation or a claims investigation process. It is important to note that this duty is narrower than the duty to defend, which obligates the insurer to provide a legal defense to the insured against covered claims, regardless of the outcome of the litigation. The duty to indemnify only requires the insurer to pay for losses that are actually covered by the policy, and this determination is made after the insured's liability has been ascertained.