Counter-indemnity: Difference between revisions
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imported>Doug Williamson (Note sometimes known as 'indemnity'.) |
imported>Doug Williamson m (Add category.) |
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* [[Multilateral netting]] | * [[Multilateral netting]] | ||
* [[Performance bond]] | * [[Performance bond]] | ||
[[Category:Manage_risks]] | |||
Revision as of 11:14, 1 October 2020
A counter-indemnity is an obligation to make a reimbursement in relation to a primary indemnity, guarantee, bond or any similar arrangment.
For example, we may be a corporate supplier in a commercial contract.
As part of the contractual arrangements, our bank may issue a performance bond to our customer.
This gives rise to a contingent liability for our bank.
The bank will require a counter-indemnity from ourselves, in favour of the bank.
If the performance bond is called, we must indemnify the bank under the counter-indemnity.
A counter-indemnity is sometimes also known more simply as an 'indemnity'.
