Indemnity

An indemnity is a promise to make good a defined loss, distinct from a guarantee because it creates a primary, not secondary, obligation. In shipping the everyday form is the letter of indemnity given to a carrier so it will deliver cargo without production of an original bill of lading, or accept a clean bill against a claused mate’s receipt. Such an LOI is enforceable between the parties but is void as against the true cargo owner where its purpose is to defraud, since the law will not enforce an indemnity for a deliberate wrong.