Which term describes the obligation to compensate another party for losses caused by a specific event?

• A. Indemnify
• B. Liability
• C. Malfeasance
• D. Negligence

Answer: (A)

The idea being tested is the duty to compensate someone for losses caused by a defined event. Indemnify means to promise or provide compensation to make someone whole for those losses. It captures the action of covering damages tied to a specific event, which is exactly what the question describes. The other terms describe different concepts: liability is the state of being legally responsible, malfeasance is illegal wrongdoing, and negligence is failure to exercise reasonable care. So indemnify best fits as the obligation to compensate for losses due to a particular event.