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An indemnity agreement provides protection against loss, commonly used in high-risk activities like skydiving and bungee jumping to shield businesses from liability. In surety, it’s a signed document between a principal and a surety, where the principal agrees to indemnify the surety if a claim arises. Indemnification involves reimbursing the surety for any claims paid out; for instance, if a surety pays $20,000 on a claim, the principal must repay that amount. Typically, all business owners must sign an indemnity agreement, which may also require spousal indemnity or third-party witnesses, depending on the situation.
