Reimburse vs. Indemnify — What's the Difference?
By Tayyaba Rehman & Fiza Rafique — Updated on May 8, 2024
"Reimburse" involves compensating someone for an expense already incurred, while "indemnify" means protecting against financial loss or providing security for compensation.
Difference Between Reimburse and Indemnify
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Key Differences
Reimbursement typically involves paying back money that someone has already spent, usually for expenses that are directly incurred as part of their duties or agreements. On the other hand, to indemnify someone is to agree to compensate them for future losses that may occur under specific circumstances, providing a form of financial protection.
When you reimburse, you are effectively returning money that has been outlaid, such as travel expenses or business costs. Whereas, indemnification covers potential legal claims or liabilities that one might face, ensuring financial coverage or defense.
Reimbursement is a straightforward transaction, often devoid of legal complexity, primarily concerned with restoring funds. Conversely, indemnification can involve complex legal agreements and is commonly seen in contracts and insurance policies where liability risks are involved.
While reimbursement is about settling actual expenditures, indemnification is proactive, aiming to safeguard against possible financial damages or lawsuits.
Comparison Chart
Definition
To pay back money spent by someone.
To compensate for loss or protect against claims.
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Focus
Refunding actual expenses.
Protecting against future losses.
Common Usage
Business expenses, travel costs.
Legal claims, liabilities in contracts.
Legal Complexity
Generally straightforward.
Often involves legal agreements.
Aim
To restore funds spent.
To provide security against potential losses.
Compare with Definitions
Reimburse
Repayment for personal money used in professional settings.
He got reimbursed for the conference fees.
Indemnify
To offer compensation as a preventative financial measure.
The agreement ensures to indemnify against theft.
Reimburse
Financially compensating for out-of-pocket costs.
Submit your receipts to be reimbursed.
Indemnify
To compensate for losses or damages.
The insurance policy will indemnify the homeowner against fire damage.
Reimburse
To pay back money to someone for expenses incurred.
The company will reimburse your travel expenses.
Indemnify
To secure against future claims or liabilities.
Indemnify the contractor for losses during the project.
Reimburse
Restoring the amount spent during employment duties.
Employees are usually reimbursed for client entertainment expenses.
Indemnify
Providing financial protection through legal means.
The contract includes clauses to indemnify directors.
Reimburse
Refund of money spent on behalf of another.
She was reimbursed for purchasing office supplies.
Indemnify
Legal commitment to cover potential financial risks.
The company agreed to indemnify its executives.
Reimburse
To repay (money spent); refund.
Indemnify
To protect against damage, loss, or injury; insure.
Reimburse
To pay back or compensate (another party) for money spent or losses incurred.
Indemnify
To make compensation to for damage, loss, or injury suffered.
Reimburse
To compensate with payment; especially, to repay money spent on one's behalf.
The company will reimburse you for your expenses for the business trip.
Indemnify
To secure against loss or damage; to insure.
Reimburse
To replace in a treasury or purse, as an equivalent for what has been taken, lost, or expended; to refund; to pay back; to restore; as, to reimburse the expenses of a war.
Indemnify
To compensate or reimburse someone for some expense or injury.
Reimburse
To make restoration or payment of an equivalent to (a person); to pay back to; to indemnify; - often reflexive; as, to reimburse one's self by successful speculation.
Indemnify
To hurt, to harm
Reimburse
Pay back for some expense incurred;
Can the company reimburse me for my professional travel?
Indemnify
To save harmless; to secure against loss or damage; to insure.
The states must at last engage to the merchants here that they will indemnify them from all that shall fall out.
Reimburse
Reimburse or compensate (someone), as for a loss
Indemnify
To make restitution or compensation for, as for that which is lost; to make whole; to reimburse; to compensate.
Indemnify
Secure against future loss, damage, or liability; give security for;
This plan indemnifies workers against wages lost through illness
Indemnify
Make amends for; pay compensation for;
One can never fully repair the suffering and losses of the Jews in the Third Reich
She was compensated for the loss of her arm in the accident
Common Curiosities
Can reimbursement cover personal expenses?
Generally, only business-related expenses are eligible for reimbursement unless otherwise specified.
What types of expenses are commonly reimbursed?
Common reimbursable expenses include business travel, supplies, and other job-related costs.
Are reimbursements taxable?
Reimbursements are not typically taxable if they are made through an accountable plan based on actual expenses.
What is the difference between being insured and indemnified?
Being insured refers to having an insurance policy that covers specific risks, whereas being indemnified can involve broader protection through various legal agreements.
How do you claim a reimbursement?
To claim a reimbursement, you typically need to submit expense reports with receipts or proof of expenditure.
What does indemnify mean in legal terms?
In legal terms, to indemnify means to compensate someone for harm or loss, or to protect them against potential future losses.
What does it mean to reimburse someone?
To reimburse someone means to pay them back for expenses they have already incurred.
How does indemnification work in insurance?
In insurance, indemnification means the insurer agrees to cover losses or damages as specified in the policy.
Are indemnity clauses important in contracts?
Yes, indemnity clauses are crucial as they specify the protection and compensation for losses within the contractual relationship.
Can a person be indemnified for criminal acts?
Typically, indemnification does not cover criminal acts as it is intended to protect against losses or damages arising from lawful activities.
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Written by
Tayyaba RehmanTayyaba Rehman is a distinguished writer, currently serving as a primary contributor to askdifference.com. As a researcher in semantics and etymology, Tayyaba's passion for the complexity of languages and their distinctions has found a perfect home on the platform. Tayyaba delves into the intricacies of language, distinguishing between commonly confused words and phrases, thereby providing clarity for readers worldwide.
Co-written by
Fiza RafiqueFiza Rafique is a skilled content writer at AskDifference.com, where she meticulously refines and enhances written pieces. Drawing from her vast editorial expertise, Fiza ensures clarity, accuracy, and precision in every article. Passionate about language, she continually seeks to elevate the quality of content for readers worldwide.
