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An indemnity agreement provides protection against loss, essential for 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, stipulating that the principal will indemnify the surety in the event of a claim. Indemnification involves reimbursing the surety for any payouts made on behalf of the principal, such as repaying $20,000 if a claim results in that amount being paid out. Typically, business owners must sign an indemnity agreement, which may sometimes require additional signatures from spouses or third-party witnesses.
