Indemnity agreements protect surety markets from losses in the event bonded individuals or companies (also known as "principals") fail to uphold the obligations outlined in the legal language of their bonds.
There are a few reasons why you might be required to indemnify a bond.
- You're an individual purchasing a bond for yourself
- You're an individual purchasing a bond for a company you own
- You're a partner or co-owner of a company that's purchasing a bond
- You're the spouse of an individual that owns a company
- You're cosigning a new surety bond application
- You're the legal owner of a sister or parent company associated with a bonded principal
By indemnifying the bond, you and all other indemnitors personally guarantee to hold the surety market harmless from liability in the event the principal does not fulfill its obligation and a claim is made. This means any losses paid out by the surety market will be reimbursed by the bonded principal and/or all other parties that indemnified the bond.
Indemnification requirements are set by surety markets, which means your underwriter will determine who exactly needs to indemnify.
Although indemnification might sound confusing, SuretyBonds.com makes the process quick and easy by offering DocuSign digital signature completion to our clients. For more information about our DocuSign digital signature process, read this related article. For a more detailed explanation about what indemnity agreements are, read this related article.
If you have additional questions about indemnification or how to sign an indemnity agreement, please call 1 (800) 308-4358 or email email@example.com, and one of our friendly representatives will be happy to walk you through the process.