The term used for the payment awarded to restore a party to the position they were in before a loss is:

The term "indemnification" refers to the principle of restoring a party to the financial position they were in prior to a loss. This concept is a cornerstone of insurance and risk management because it ensures that a claimant is not left worse off after a loss has occurred, but rather is made whole again.

In the context of public adjusting, indemnification is crucial because it underscores the role of an adjuster in negotiating on behalf of clients to ensure they receive compensation that accurately reflects their losses. This prevents insurance companies from profiting from claimants' setbacks and upholds the intended functionality of insurance – providing financial protection against unforeseen events.

Other terms, while related, do not specifically capture this fundamental concept of being restored to a prior state after a loss. For instance, reimbursement often refers specifically to the act of repaying someone for out-of-pocket expenses rather than restoring them to a prior financial state. Recovery can imply gaining back something lost but does not specifically denote the idea of restoring to a previous position. Settlement is more about reaching an agreement between parties regarding a claim and does not necessarily focus on the restoration aspect. Indemnification is the precise term that embodies the goal of creating a fair and equitable outcome following a loss.