A Letter of Indemnity (LOI) is a legal document in which one party agrees to compensate another for any loss or damage that arises from a specified transaction or activity, often used in shipping to facilitate the release of cargo without presenting the original Bill of Lading.
In the context of international trade and shipping, a Letter of Indemnity is commonly used to address situations where the original Bill of Lading is not available at the time of cargo delivery. The LOI serves as a guarantee from the shipper or consignee to the carrier, promising to cover any potential losses, damages, or legal liabilities that might occur due to releasing the cargo without the original document. This ensures that the carrier is protected while enabling the timely delivery of goods. The LOI must be carefully drafted to clearly outline the terms and conditions, the scope of indemnity, and the responsibilities of the involved parties. It is a vital tool for maintaining the flow of trade and mitigating risks associated with document delays or discrepancies.
Letter of Indemnity