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 Tennessee, the duty to indemnify is a contractual obligation of an insurance company to cover the policyholder for certain losses or damages specified in the insurance policy. This duty is typically found in liability insurance policies, which may include coverage for claims of personal injury and property damage to third parties. The duty to indemnify is activated when the policyholder's liability is established, and it is contingent upon the claim falling within the scope of coverage as defined by the policy terms. Unlike the broader duty to defend, which obligates the insurer to provide a legal defense to the insured against covered claims regardless of their merit, the duty to indemnify is only triggered after a determination that the policyholder is liable for a covered loss. Tennessee courts will interpret the insurance policy and apply the facts of the case to decide whether the insurer must indemnify the insured. It is important for policyholders to understand the specific provisions of their insurance policies and for insurers to conduct a thorough investigation of claims to determine their indemnification obligations.