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An indemnity agreement provides protection against loss, often required in high-risk activities like skydiving and bungee jumping to shield businesses from liability. In surety contexts, it is a signed document between a principal and a surety, stating that the principal will indemnify the surety if a claim arises. Indemnification means restoring the surety, for instance, if the surety pays a $20,000 claim, the principal must repay the same amount. Typically, all business owners must sign an indemnity agreement, which may sometimes require spousal indemnity or a third-party witness for all signatures.
