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An indemnity agreement provides protection against loss, often required in high-risk activities like skydiving or bungee jumping to shield businesses from liability. In surety, it involves a signed document between a principal and a surety, where the principal agrees to indemnify the surety if a claim arises. Indemnification ensures that the principal repays the surety for any claims paid out, such as $20,000. Business owners typically sign indemnity agreements, though sometimes only top applicants may need to, and in certain situations, spousal indemnity or third-party witnesses may be required for signatures.
