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Surety bonds appear risk-free for companies issuing them. The bond specifies terms between principal, surety, and obligee, detailing payout if a claim is made. However, reimbursement terms are typically absent. The key to issuing bonds confidently lies in indemnity agreements. These contracts shift risk from one party to another, with the indemnitor assuming risk and the surety company being absolved of liability.Indemnity agreements are crucial for ensuring that surety companies do not suffer losses when issuing surety bonds.
