What is the term used to describe compensation for loss or injury sustained?

The term that best describes compensation for loss or injury sustained is "indemnity." In insurance and legal contexts, indemnity refers to the obligation of one party to compensate another for incurred losses or damages. This principle is foundational in ensuring that individuals or entities do not suffer financial loss due to the actions or failures of others.

Indemnity often manifests through the payment of claims by insurance companies to policyholders who have experienced a covered loss. The aim is to restore the insured party to the financial position they were in before the loss occurred, effectively reversing the adverse impact of that loss.

While rest of the options like restitution, compensation, and reparation also involve the concepts of providing redress for loss or injury, they carry different nuances and are often used in specific contexts. Restitution generally refers to returning something to its original state or compensating for loss in a way that seeks to restore the victim. Compensation is a broader term that encompasses various forms of payment for losses, while reparation often refers to making amends, particularly in legal or moral contexts, and might imply a broader social or communal responsibility. Indemnity, however, is the precise term that aligns with the specific nature of financial compensation for loss or injury in an insurance framework