indemnity bond

Definition

An insurance bond used by mortgage providers as an additional measure of security to cover loan amounts worth about 75% o the value of the property. This bond protects lenders from loss should the borrower default on a loan.

Use indemnity bond in a sentence

You may want to try and take out an indemnity bond if you think that it will help you earn more in the future.

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Weary of the customerïs ability to pay back the loan on a big house, the lender issued an indemnity bond so as not to lose money on a potential default.

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indemnity bond An indemnity bond is, at its basic level, a type of insurance policy that ensures one party to a contract will perform as required. indemnity bonds, also referred to as surety bonds, are used across the business world. Commerce would not flow if there wasn't some mechanism in place to assure payment if one of the parties to a contract failed to act.

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indemnity indenture