indemnity

Related Terms
Undertaking given to compensate for (or to provide protection against) injury, loss, incurred penalties, or from a contingent liability. A shipping company, for example, will ask for a bank's indemnity for releasing a shipment to a consignee who has lost original shipping documents. The bank in turn will require the consignee to sign a counter-indemnity before issuing its indemnity to the shipping company. This way the consignee gets the release of shipment in completion of a transaction, and both the shipping company and the bank are protected in case some dispute arises out of that transaction.
See also letter of indemnity.

Use 'indemnity' in a Sentence

Due to the tricky nature of transporting the world's most expensive diamond, indemnity was given to the truck company that was transporting the diamond because the truck route involved a very dangerous area of the country.
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Since the new cars were coming in that afternoon, Arthur stopped by the bank to see what sort of indemnity could be arranged to protect the dealership completely.
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The transport company asked for indemnity regarding shipping of a package to a customer who has lost the receipt documents.
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