What does the term "indemnity" mean as it pertains to insurance?

Indemnity or insurance is a reimbursement for damages, destruction or forfeiture, and in the legal sense, it may also refer to an exclusion from legal responsibility for damages. The perception of indemnity is based on a predetermined arrangement made between two parties, wherein one party approves to pay for probable losses or forfeiture produced by the other party. A typical illustration is an insurance agreement, whereby the insurer decides to recompense the indemnitee for any destruction or losses, in return for rewards paid by the insured to the person underwrites an insurance jeopardy.