What is indemnity?
Investopedia defines indemnity as “a comprehensive form of insurance compensation for damages or loss. When the term indemnity is used in the legal sense, it may also refer to an exemption from liability for damages.”
In an indemnity contract, one party agrees to pay for potential losses or damages caused by another party. This type of contract is typically used in insurance, where the insurer agrees to pay for any damages or losses the policyholder experiences in return for the premiums paid by the policyholder.
What is indemnity in stock photography?
In the simplest terms, an indemnity or legal coverage is the maximum amount of legal fees and other damages the stock agency guarantees to cover for you if they arise from their fault.
For example, if the owner of a photo sues you for copyright infringement in the amount of $6,000 and the stock agency from which you got the photo provides a $5,000 indemnity, you still pay $1,000. From this example, you see how important legal coverage is.
Why do we check indemnity?
Whenever we review/test a new stock photo agency or re-test an agency we’ve already reviewed, we also check the indemnity amount for all licenses they offer. And it remains one of the major factors we use to rank and judge stock photo sites.
Indemnity tells us how confident a stock agency is in the legitimacy of its assets. A stock agency that provides unlimited indemnity, like Adobe Stock and Getty Images, shows that they 100% believe in their stock images and that they have been acquired legally, otherwise, they wouldn’t be willing to put their budget at such a risk. In contrast, stock agencies with very low legal coverage always make us doubt. For example, Envato Elements offers legal coverage only in the value of subscription fees you’ve paid so far; in other words, you get a full refund while leaving you alone to deal with the issues that arose from their mistake. We’re very skeptical of such stock photo agencies and always warn our readers about them.
Should you care about indemnity?
Yes, we think indemnity is very important in stock photography. As we described earlier, indemnity indicates how much a stock agency trusts in their own images, thus hinting at their legitimacy. This is even more important for you because indemnity protects you against lawsuits (or at least paying for them), thus giving you a peace of mind. So, indemnity protects you and gives you information about a stock agency at the same time.
Is image pricing related to the indemnity amount?
We plotted the indemnity values of all stock agencies against their average image price and found no correlation between the pricing and indemnity. This shows that most stock agencies don’t invest towards ensuring the legitimacy of the images they license (considering comparable image quality) or it shows that paying a lot more for any image, doesn’t necessarily mean that it is better or safe to use.