The Law Dictionary

Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

LETTER OF INDEMNITY Definition & Legal Meaning

Definition & Citations:

A bank or insurance company promises by this written confirmation to act as a 3rd-party on behalf of the first party in a transaction or contract. This 3rd-party covers loss or damage to the 2nd-party in the agreement caused by the first party. Also known as indemnity bond.

TLD Example: The purchase of the new equipment could not be completed without a letter of indemnity from the bank supporting the buyer’s financial stability.


This article contains general legal information but does not constitute professional legal advice for your particular situation. The Law Dictionary is not a law firm, and this page does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.