The Indemnity Agreement

The indemnity agreement is the legal document that fully discloses the Principal's obligations in a surety relationship, and allows the Surety the right to recover any losses paid out on behalf of a Principal. The Principal is the primary responsible party under the bond, and must agree to reimburse the Surety for any claims or expenses they incurred because the Principal has not lived up to their agreement.

The Indemnity Agreement is typically part of the bond application, or in certain instances, depending on the number of bonds, and bond volume, the surety will request a General Agreement of Indemnity to be signed, which will cover existing and future bonds. This eliminates the need for the applicant to sign numerous bond applications.

Refer to Indemnity Agreement on bond application.