An indemnity is a sum paid by A to B by way of compensation for a particular loss suffered by B.

The
indemnitor (A) may or may not be responsible for the loss suffered by the indemnitee (B). Forms of indemnity
include cash payments, repairs, replacement, and reinstatement.

Indemnity is often used as a synonym for compensation or reparation.

As a legal concept, it has a more specific meaning, namely, to compensate another party to a contract for any loss
that such other party may suffer during the performance of the contract. For instance, compensation connotes
merely a sum paid to make good the loss of another without regard to the payer's identity or their reasons for
doing so. As the following paragraphs should explain, an indemnity is a sub-species of compensation, in the same
way that Damages and reparation are.

The obligation to indemnify differs from the obligation to pay compensation, or make reparation, in that an
obligation to indemnify is a voluntary obligation. If C crashes into B's car and damages it and the crash is due to
C's negligence, most legal systems will impose liability upon C to pay B for the damage caused. C's obligation to
B arises by force of law regardless of whether C subjectively wishes to compensate B. This is not, therefore, a
situation of indemnity; the relationship between B and C is involuntary. In legal terms, it is a case of tortious
(common law) or unlawful act (civil law) liability.

But, if A had a contract with B under which A agreed to pay for any damage to B's car, then A paying B would be
obligatory (even if A subjectively regretted the contract at this point). In legal terms, A's liability is contractual
and the sum paid is an indemnity. The contract just described between A and B is of course one of automobile
comprehensive insurance.

The first paragraph stated that the indemnifying party (A) may also be the party responsible for the loss. This is
because although A will probably have a legal duty to compensate B (depending on the rules for damage
wrongfully caused in the relevant legal system), A may also have a contractual duty to compensate C. Such
indemnity clauses can be found in many contracts aside from those specifically for insurance. For instance,
(staying with the automobile theme), a car rental contract may stipulate that the renter will be responsible for
damage to the rental car caused by the renter's reckless driving. In this case, the renter will indemnify the rental
company.

An obligation to indemnity can also be distinguished from a guarantee granted by one party in regard to the
potential debts of another. For example A might agree to stand guarantor (or surety) for her son C (an
impecunious law student) so that if C cannot afford to pay his rent to B (his canny landlord), A will be obliged to
pay for him. Here, C is the one primarily responsible for payment of the rent. A's liability is only ancillary. The
liability of an indemnifier, properly so-called, is primary. This distinction between indemnity and guarantee was
discussed as early as the eighteenth century in Birkmya v Darnell.[1] In that case, concerned with a guarantee of
payment for goods rather than payment of rent, the presiding judge explained that a guarantee effectively says
"Let him have the goods; if he does not pay you, I will." By contrast, an indemnity is like saying "Let him have
the goods, I will be your paymaster."[2]
Indemnity in particular legal systems

Indemnity clauses
Under section 4 of the Statute of Frauds 1677, indemnity clauses must be constituted in writing.
In the UK, under the Unfair Contract Terms Act 1977 s4, a consumer cannot be made to unreasonably indemnify
another for their breach of contract or negligence.

Insurance
Indemnity insurance compensates the beneficiaries of the policies for their actual economic losses, up to the
limiting amount of the insurance policy. It generally requires the insured to prove the amount of its loss before it
can recover. Recovery is limited to the amount of the provable loss even if the face amount of the policy is higher.
This is in contrast to, for example, life insurance, where the amount of the beneficiary's economic loss is
irrelevant. The death of the person whose life is insured for reasons not excluded from the policy obligate the
insurer to pay the entire policy amount to the beneficiary.

Most business interruption insurance policies contain an Extended Period of Indemnity Endorsement, which
extends coverage beyond the time that it takes to physically restore the property. This provision covers additional
expenses that allow the business to return to prosperity and help the business restore revenues to pre-loss levels.[5]

Double indemnity (insurance

Double indemnity is a clause or provision in a life insurance or accident policy whereby the company agrees to
pay the stated multiple (i.e. double) of the face amount in the contract in cases of death caused by accidental
means. This includes murder by a person other than, and not in collusion with, the beneficiary of the insurance
policy, and most accidental deaths. It excludes suicide, and deaths caused by the insured person's own gross
negligence, as well as natural causes, such as cancer or heart disease.[1]

In 2006, 5.01% of all deaths in the United States were declared accidental.[2] For this reason, double-indemnity
clauses are usually relatively cheap and often aggressively marketed, especially to people over 45. Children and
people in dangerous jobs, such as heavy construction, are the exceptions.[3]

What is an indemnity bond

It's a bond to repay a lender in the event of a shortfall in a loan repayment.

For example, in real estate, a lender may require an indemnity bond in markets with slow growth in
cases where the loan amount is greater than 75% of the home's value. In the event of forclosure and if
the house is sold to pay off the loan, but there is negative equity (house is worth less than the loan
amount), the indemnity bond pays the difference. There's a fee for having an indemnity bond in place if
required by a lender, but it protects lenders in riskier loan situations.

INDEMNITY BOND

This bond of indemnity is made at _______on this ______day at ____________________,

AND
_______________Indian Inhabitant, residing at _________________________(hereinafter called as 'OBLIGOR')
______________________________by its Chairman/Secretary, a co-op housing society registered as under
M.C.S.Act, 1960 (hereinafter called as 'OBLIGEE')

WHEREAS the obligee is a Co-op Housing society registered under the M.C.S. Act, 1960 and is registered as
tenant
co-operative housing society;

ANDWHEREAS the society has its registered bye-laws duly approved by the Registrar, Co-Op. Societies and
is an
obligation on each allottee member/flat holder/apartment/shop holder to obtain prior permission for
effecting the
transfer in favour of any other person than the member/purchaser;

AND WHEREAS the obligor by an agreement dt.______ has intended to purchase the flat bearing
no._____which is
situated in obligee co-op housing society comprising of_____rooms form shri/smt.______________who was
holding the flat no._________.

WHEREAS the obligor for the purpose of validating the transfer approached the society and society after
initially
exchanging the correspondence in the matter came to the conclusion by considering its proposal in the
Managing
Committee to recognise the said agreement for effecting the transfer and called the obligor to execute the
indemnity bond for the transfer. As such the obligor is executing the said bond of indemnity so as to
indemnify the
obligee against any claims or demands whatsoever made in respect of the said _______rooms,
in________(address) which is adjacent to __________ premises owned and possessed by the obligor. Are
executing the said bond of indemnify so as to indemnify the obligee against any claims or demands
whatsoever
made in respect of the said two rooms, in_____ adjacent to shopping premises owned and possessed by the
obligor.

NOW THIS INDENTURE WITNESSETH AS FOLLOWS

That the said obligor their heirs, executors or administrators, assigns shall from time to time and at all times
hereinafter keep indemnified the said obligee their office bearers from and against all actions, losses,
charges,
expenses, claims and demands whatsoever in respect of the said premises comprising of ______rooms on the
obligee validating the transfer of the above mentioned premises.

IN WITNESS WHEREOF, we the obligor have hereunto set and subscribed their respective hands and seals
the day
and year first hereinabove written.

Signed, sealed and delivered

By the abovenamed:-

1)
DISCLAIMER:These legal forms and documents are for reference only. Any agreement that you enter into, should be in consultation with
a Solicitor or an Advocate. India Properties Com Pvt. Ltd. will not be responsible for any claim arising out of the use of any of the above
mentioned documents.
A "contract of guarantee" is a contract to perform the promise, or discharge the liability, of a third
person in case of his default. The person who gives the guarantee is called the "surety", the person in
respect of whose default the guarantee is given is called the "principal debtor", and the person to whom
the guarantee is given is called the "creditor". A guarantee may be either oral or written.

Distinguish between Contract of Indemnity and Contract of guarantee.

CONTRACT OF INDEMNITY

1 There are two parties

to the contract viz.
the indemnifier and the
indemnified

2 The liability of the

indemnifier to the
indemnifed is primary

CONTRACT OF GUARANTEE

1 There are three parties

to the contract viz. the
creditor, the principal
debtor and the surety.

2 The liability of the

surety to the creditor
is collateral or secondary
the primary liability being
that of the principal debtor

Purpose: A contract of indemnity is formed to provide compensation of loss. A contract of guarantee is formed to give
assurance to the creditor in lieu for his money.