A Letter of Indemnity (LOI) that on contract guarantees some provisions that will meet in between two parties. These letter are drafted traditionally by another party that let’s we call a third party organization. It could be a bank or an insurance company who has agrees to provide monetary restitution to any of the parties, that when another party, if, fail to live or reach up to its obligations. If I’d speak in different words, the main function that LOI holds is mainly to ensure that in case of losses, it’s not that only one party will suffer alone even if another party falls delinquent. The concept of letter of indemnity has to make someone free of any casualty, and to keep them harmless.
Format of Indemnity Letter
Since it is an official letter and also carries a legal standard, a standard format is there that is used to write a letter of indemnity. The format is given below for you reference:
A standard format:
****************************** Title (Letter of Indemnity) **********************************
** Date of writing this letter **
** Body/ Content of this letter (this is where you write the letter content) **
** Signatures with Dates and authorized seals (if any) **
How to Write Indemnity Letter
Following are the important tips that need to be put in mind while writing letter of indemnity. Hope they will appeal you and support the kind the letter you need to write.
- Foremost, put the title of the letter you are writing, i.e. ‘Letter of Indemnity’ because that’s how it will get the clarity about itself. Don’t forget to mention the date on which it is being written!
- Usually there letter starts with standard words like ‘we agreed that…’ which means that it is recommended that you start the letter by confirming that the contract is already finalized with the dealing (other) party. Also, it is better that mention or emphasize about the understanding in regards of the conditions of the contract.
- Words like ‘for goodness sake and valuable consideration/acceptance…’ will your letter more professional. It is going to clarify that via this contract, both the parties should give some amount of money that is considered as ‘valuable consideration’ in return of a promise with each other. It’s like binding a contract with some real commitments.
- It is also essential that you put about what might cause the each party if they failed to complete the contract. Though you don’t need to elaborate it by writing a lot but some crisp explanation would do fine.
- Also, mention what you are going to do or how you will support so that the other party won’t suffer a loss. Be very crisp and specific.
- If there’s any other important information that need to be shared and emphasize upon, the do it by writing about it.
- Get it sign along with all the authorized individuals that held responsible to understand and value this one particular letter.
Sample of Letter of Indemnity with Examples
It is always better when we get a reference to check or to get an idea about something we are working on. Therefore, here we have covered a few examples that might help in providing you some idea. For more examples and samples, you can visit our page, where more such samples are available.
