Each town shall indemnify and save harmless the town clerk of such town, whether such clerk is compensated on a salary or fee basis, from financial loss and expense, including legal fees and costs, if any, arising out of any claim, demand, suit or judgment by reason of alleged negligence resulting in any errors or omissions in the indexing or recording of any instruments in the land records of such town. Each such town may insure against the liability imposed upon it by this section in any insurance company authorized by law to write such insurance in this state, or may elect to act as self-insurer of such liability.