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Surety bonds are assumed to carry zero risk for the surety company issuing them, outlining terms between the principal, surety, and obligee. However, the bond form usually lacks specifics on the principal's reimbursement to the surety. To confidently issue bonds, surety companies use indemnity agreements to transfer risk from the principal to the surety. In this agreement, the principal is the indemnitor assuming risk, while the surety company is the indemnity being absolved of liability.