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Indemnity Agreement: Although similar to a hold harmless agreement, an indemnity agreement is an arrangement whereby one party agrees to pay the other party for any damages regardless of who is at fault.
For applicants with good credit, surety bonds usually cost between 1% and 5% of their value. Therefore, for a surety bond of $5,000, an applicant with a strong credit history can expect to pay between $50 and $250.
Key Differences Between Surety Bonds and Bond Indemnity Financial Responsibility: In a surety bond, the surety provides a financial guarantee for the principals obligations, whereas in bond indemnity, the principal assumes financial responsibility for any losses incurred by the surety.
A Surety Bond Indemnity Agreement is an agreement between the principal and the surety bond company stating the company will be indemnified if it pays out a loss on the Principals behalf due to a surety bond claim.
In short, indemnity compels a party to compensate another party. Regarding a surety bond, this means that the obligee has the legal right to collect from the surety if the principal of the bond fails to uphold their end of the bond.
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An indemnity bond assures the holder of the bond, that they will be duly compensated in case of a possible loss. This bond is an agreement that protects the lender from loss if the borrower defaults on a legally binding loan.