Sample Shippers’ Indemnities

Shippers’ indemnities should be addressed to the bank to which you are presenting documents and follow one of the following formats:

BLANKET INDEMNITY

A blanket indemnity should be on company letterhead, signed by an authorized signatory, and should read as follows:

In consideration of your honoring/negotiating our drawings presented to you under any and all letters of credit issued in our favor notwithstanding any discrepancies which might exist therein, we hereby agree to pay you on demand the amount of each such drawing (with interest at the per annum rate of __% from demand until paid in full) and to indemnify and hold you harmless for any other losses, costs, and expenses (including, without limitation, reasonable attorneys’ fees and court costs) incurred in connection therewith or the enforcement hereof, in the event that the documents included in the drawing are refused by the issuing bank or the issuing bank fails, for any reason, to pay a drawing honored or negotiated by you. This agreement does not preclude any other rights you might have against us by reason of such drawings.
TRANSACTIONAL INDEMNITY
A transactional indemnity should appear on the company’s transmittal cover letter or be on separate company letterhead, signed by an authorized signatory, and read as follows:

Re: Our reference ___________________ dated ___________________________ for (amount) drawn under letter of credit number _________________ issued by ________________________, Bank reference ______________________.

In consideration of your honoring/negotiating the above described drawing under the cited letter of credit, notwithstanding the following: (list of discrepancies or the words “ any discrepancies which might exist therein”)

we hereby agree to pay you on demand the amount of such drawing (with interest at the per annum rate of __% from demand until paid in full) and to indemnify and hold you harmless for any other losses, costs, and expenses (including, without limitation, reasonable attorneys’ fees and court costs) incurred in connection therewith or the enforcement hereof, in the event that the documents included in the drawing are refused by the issuing bank or the issuing bank fails, for any reason, to pay the drawing. This agreement does not preclude any other rights you might have against us by reason of such drawings.