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What is an indemnity bond?

asked by bizco17 (36)

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Tags:  insurance  loans  money

answers

Indemnity bond is defined as a bond to repay a lender in the event of a shortfall in a loan repayment. While purchasing a property and a loan is taken in bank the lender has to give indemnity bond stating that if the value of the property is less than the loan amount he will repay with other source.

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posted by mani (810)
7 votes

An indemnity bond is an agreement to hold a carrier harmless with regard to a liability. Its Coverage for loss of an obligee in the event that the principal fails to perform according to standards agreed upon between the obligee. Insurance, real estate and share market have the the indemnity bonds

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posted by unni (255)
6 votes

It is a financial instrument that covers the lender's loss when the borrower defaults on the loan and the collateral is sold for less than the loan balance.

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posted by Mike39 (303)
5 votes

Indemnity bond is a bond, which is to be repaid to his lender in case of shortfall to the loan repayment.

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posted by RSureash (15)
5 votes

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