An Indemnity Agreement is a legally binding contract between two parties which promises that one of the parties will compensate the other for any losses or damages incurred. Essentially, an indemnity agreement shifts the risk and financial burden of those losses or damages from one party to another. In such agreements, one party will agree to protect the other party from certain liabilities, including legal costs, that could arise due to an incident or event made by either party. The indemnitee usually provides the indemnitor with evidence of insurance coverage in order to prove their willingness to pay out claims if necessary. In essence, an indemnity agreement is a promise for protection in the face of uncertain risks that may arise.