Counter Indemnity Law and Legal Definition

Indemnification is the act of making another "whole" by paying any loss another might suffer. The party who pays the loss is called a guarantor. Counter indemnity agreements allow a guarantor to seek reimbursement in the event they have to pay a claim for any part of the guarantee amount they must pay in the event of a default in the primary agreement. Such agreements are governed by contract law and are used in such transactions as bonds and loans, etc.