Which term means to restore the victim of a loss by payment, repair, or replacement?

• A. Indemnify
• B. General Aggregate Limit
• C. Hold-Harmless Agreement
• D. Peril

Answer: (A)

Restoring someone after a loss by paying, repairing, or replacing what was damaged is called indemnification. Indemnify means compensating the injured party so they’re made whole again, whether that’s through money, fixing the damaged property, or replacing it. In insurance and construction contracts, this term describes the obligation to compensate for losses and return the claimant to their original position.

The other terms refer to different ideas: a general aggregate limit is the total amount an insurer will pay for all claims in a policy period; a hold-harmless agreement shifts risk by contract so one party isn’t liable for certain damages; a peril is a specific cause of loss, like fire or theft.