Letter of Indemnity

An indemnity issued by a seller to a buyer or a buyer to a Carrier in respect of any loss which may be suffered by a buyer or a Carrier (as applicable) as a result of the seller or the buyer (as applicable) being unable to provide the buyer or the Carrier (as applicable) with Bills of Lading. Letters of indemnity are prevalent in the oil trade.

Also applied to an indemnity offered by a Shipper to a Carrier for any loss which may be suffered by a Carrier resulting from the issue of a Clean Bill of Lading although the Carrier is aware that the goods are not in apparent good order and condition.
 

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