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An indemnity agreement provides protection against loss, often required in high-risk activities like skydiving or bungee jumping to shield businesses from liability. In the context of surety bonds, it is a document between a principal and a surety, stating that the principal will indemnify the surety if a claim arises. Indemnification means reimbursing the surety for any payouts made, such as $20,000 in claims. Typically, business owners must sign an indemnity agreement, though sometimes only top applicants need to do so. In certain cases, spousal indemnity or a third-party witness may also be required for signatures.
