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An indemnity agreement provides protection against loss, commonly required in high-risk activities like skydiving and bungee jumping to shield businesses from liability. In the context of surety, it is a signed document between a principal and a surety, stating that the principal will indemnify the surety in the event of a claim. Indemnification involves repaying the surety for any claims they cover, such as a $20,000 payout that the principal must repay. Typically, all business owners must sign an indemnity agreement, though sometimes only the top applicant is required to do so, and it may also involve spousal indemnity or witness signatures.
