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Surety bonds are assumed to carry zero risk for the company issuing them. The bond outlines terms of the agreement between principal, surety company, and obligee. It does not mention reimbursement to the surety. An indemnity agreement transfers risk from one party to another in surety bonds. The indemnitor assumes risk, while the surety company is absolved of liability. The indemnity agreement is crucial for surety companies to confidently issue bonds without anticipating losses.