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An indemnity agreement provides protection against loss, particularly in high-risk activities like skydiving or bungee jumping, shielding businesses from liability. In the context of surety, it is a signed document between a principal and a surety, indicating that the principal will indemnify the surety in case of a claim. Indemnification ensures that the principal compensates the surety for any payouts, such as repaying $20,000 if the surety covers a claim of that amount. Typically, all business owners must sign an indemnity agreement, and in some cases, additional signatories like a spouse or third-party witness may be required.
