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Meaning & use

indemnity bond

noun·Advanced

Last updated

UK/ɪnˈdemnəti bɒnd/
US/ɪnˈdemnəti bɑːnd/

Meaning

  1. nouncountablelegalfinance

    A legal agreement in which one party promises to protect another from financial loss or damage.

    Grammar: Countable: an indemnity bond, the indemnity bonds. Often used with 'sign' or 'issue'.

    Patterns

    • sign an indemnity bond
    • issue an indemnity bond
    • an indemnity bond against something

    The builder had to sign an indemnity bond before starting the project.

    The court required an indemnity bond to protect the buyer from hidden debts.

    An indemnity bond can cover losses if the contractor fails to finish the work.

Word forms

pluralindemnity bonds

Common combinations

sign an indemnity bond
Both companies signed an indemnity bond as part of the deal.
issue an indemnity bond
The bank agreed to issue an indemnity bond for the shipment.
an indemnity bond against loss
They took out an indemnity bond against loss during transport.

Synonyms and how they differ

guarantee
A general promise to ensure something; an indemnity bond is a specific legal document about covering losses.
insurance policy
An insurance policy spreads risk among many people; an indemnity bond is usually a one-off legal promise between parties.

Word family

indemnify verb
To protect someone against loss or damage, usually by paying money.
indemnity noun
Protection against loss, or money paid as compensation.

Commonly confused: indemnity bond or indemnity insurance?

indemnity bond vs indemnity insurance

Indemnity insurance is a type of cover; an indemnity bond is a formal agreement or document.

Practice

A company wants legal protection against possible financial loss from a contract. What should it ask for?

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