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 New York, the duty to indemnify is a fundamental obligation of an insurance company under a liability insurance policy. This duty requires the insurer to cover the insured for any loss or damage when a claim falls within the scope of the policy's coverage. The duty to indemnify is activated when the insured's liability is established, typically through a court judgment or settlement that confirms the insured is legally responsible for the third party's injury or property damage. At that point, the insurer must review the facts and circumstances of the claim to determine if they align with the coverage provisions of the policy. Unlike the broader duty to defend, which obligates the insurer to provide a legal defense against claims that are potentially covered by the policy, the duty to indemnify is contingent upon the claim actually being covered and the insured being found liable. New York courts will interpret the insurance policy's language to ascertain the extent of the insurer's indemnification obligations, and any ambiguities in the policy are generally construed in favor of the insured.