Indemnity Contract to Protect Surety

How surety will remain safe form loss

The surety is the guarantor who takes the responsibility of the situation when the principal or the contractor fails to perform the duties taken up by him. The relationship of the contractor and the surety is generally cordial because both of them benefit from each other. But man a tie it might happen that the principal fails. In such a situation the whole load would come on the shoulders of the surety. So in order to protect the surety a contract is signed. This indemnity contract to protect surety is a great tool in case the principal faults on his part.

The surety does not choose anyone as a partner in business. There is a thorough background check including that of capital, capacity and character that will ensure a hardworking and reliable person. It is only after spending a lot of time and researching about the contractor that surety takes the guarantee of the contractor.

But if at all the circumstances are not in favour the surety will try to not suffer any losses unlike the other forms of insurance. It is the principal or the contractor that is directly liable for the fault the surety will bear the secondary liability. This is why to put the surety in a strong position the surety must sign indemnity contract to protect surety.

This contract will waive off any liability from the surety if at all the principal or the contractor defaults or breaches the bonded agreement. This will save the surety for sure.

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Indemnity contract to protect surety.

The undersigned will at all times indemnify and keep indemnified the company, and hold and save it harmless from and against any and all liability for damages, loss, costs, charges and expenses of whatever kind or nature (including counsel and attorney’s fees) which the company shall or may, at any time, sustain or incur by reason or in consequence of having executed the bond[s] applied for and will pay over, reimburse and make good to the company, its successors and assigns, all money which the company or its representatives shall pay, or cause to be paid, or become liable to pay, by reason of the execution of any instruments, or in connection with any litigation, investigation or other matters. In any accounting which may be had between the undersigned and the company, the company shall be entitled to credit for any and all disbursements in and about matters contemplated, made by it in good faith under a belief that it is or was liable for the sums and amounts disbursed, or that it was necessary or expedient to make those disbursements, whether liability, necessity or expediency existed or not; and vouchers or other evidence of disbursements shall be taken as conclusive evidence against the undersigned of the fact and extent of the undersigned’s liability to the company.
The undersigned agrees to indemnify the company against any suit or claim brought or instituted against the company, whether the suit or claim is rightfully or wrongfully brought or instituted, and in case the suit is brought on the bond[s], the company shall be at liberty to employ an attorney of its own selection to appear and defend the suit in its behalf at the expense of the undersigned.