Letter of Indemnity

A Letter of Indemnity (LOI) is a legal document in which one party agrees to compensate another for any losses, damages, or liabilities that may occur under specified circumstances. In business and finance, it's often used to protect against potential risks, such as when goods are shipped but not yet owned by the buyer. The LOI assures the recipient that if problems arise, the issuer will cover any resulting costs. Essentially, it's a promise of financial protection, providing reassurance in transactions where trust between parties is crucial.