letter of indemnity



A written undertaking by a third party (such as a bank or insurance company), on behalf of one of the parties (the first party) to a transaction or contract, to cover the other party (the second party) against specific loss or damage arising out the action (or a failure to act) of the first party. Also called indemnity bond, bond of indemnity.

Use letter of indemnity in a sentence

  • We got tired of dealing with bad product suppliers. Our customers kept running up support costs when the supplier product was bad. As a result, we now make all suppliers provide a a letter of indemnity from their insurance company.

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