What is the difference between the duty to defend and the duty to indemnify?

Indemnification simply means that the insurer will pay any claim against you where you are liable. For instance, if you are sued for causing an automobile accident, your insurer has the choice whether to settle the claim or defend you at trial. If you go to trial and lose, the insurer must indemnify you by paying the judgment on your behalf. In some cases, the insurer may even be liable for any excess verdict beyond the policy limits.