An Indemnity Agreement is a legal contract where one party agrees to compensate another for any losses or damages that may occur. This type of agreement is often used in business transactions to protect one party from potential liabilities that could arise from the actions of the other party. In an Indemnity Agreement, the indemnifying party takes on the responsibility to cover costs related to claims, lawsuits, or damages. This ensures that the indemnified party is safeguarded against financial loss, allowing them to operate with reduced risk in their dealings with others, such as clients or contractors.