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Surety bonds are intended to carry zero risk for the surety company, detailed in the bond's terms involving the principal, surety, and obligee, including payout amounts for claims. However, reimbursement language is often missing from the bond itself. To manage this risk, indemnity agreements are crucial. An indemnity agreement is a two-party contract that allows surety companies to transfer risk. In this context, the principal (indemnitor) assumes the risk, while the surety company (indemnitee) is absolved of liability. This mechanism enables the surety company to issue bonds confidently, assuming minimal loss.