Letters of Indemnity

A Letter of Indemnity (LOI) is a document used in business transactions that provides a guarantee. When one party agrees to take responsibility for potential losses or damages caused by another party's actions, the LOI serves as written assurance. For example, in shipping, if a cargo owner needs a ship to release cargo without proper documentation, the owner might issue an LOI to protect the shipowner from future claims. Essentially, it helps manage risk by outlining who will be held accountable if something goes wrong.