What is cash payment under indemnity principle?

Cash payment under the indemnity principle refers to the compensation given in monetary form to restore an insured party to the financial position they were in before a loss occurred, without allowing them to profit from the loss. This principle ensures that the compensation is equivalent to the actual loss, covering expenses or damages incurred, but not exceeding the original value of the insured item or the loss suffered. Essentially, it aims to provide fair compensation while preventing any unjust enrichment of the insured party.