What context can I use each word in?
Learn when and how to use these words with these examples!
compensation
Example
The company offered him compensation for the extra hours he worked. [compensation: noun]
Example
The victim received compensation for the damages caused by the accident. [compensation: noun]
indemnity
Example
The insurance policy provides indemnity against any damage to the property. [indemnity: noun]
Example
The contractor agreed to indemnify the client against any legal claims. [indemnify: verb]
Good things to know
Which word is more common?
Compensation is more commonly used in everyday language and covers a wider range of contexts, while indemnity is more commonly used in legal or business contexts.
What’s the difference in the tone of formality between compensation and indemnity?
Indemnity is typically associated with formal and legal contexts, while compensation can be used in both formal and informal contexts.
