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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, it is a document between a principal and a surety, stating that the principal will indemnify the surety if a claim arises. Indemnification means compensating the surety to restore their position, such as repaying a $20,000 claim paid out by them. Most business owners are required to sign an indemnity agreement, although sometimes only the best applicants do. Additionally, spousal indemnity or a third-party witness may be needed for signatures in certain cases.
