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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 the context of surety, it is a signed document between a principal and a surety, stating that the principal will indemnify the surety if a claim arises. Indemnification involves compensating the surety for any paid claims, such as repaying $20,000 if that amount is disbursed due to a claim. Generally, business owners must sign indemnity agreements, with requirements varying from one applicant to another, and may include spousal indemnity or third-party witness signatures.
