Bulletin: WA2012001

Nothing Ventured Nothing Gained

When submitting information for approval of an indemnity agreement, make sure that the financial information that you send is for the specific proposed indemnitor. The financial statement for an entity or individual is of no use, unless that specific person or entity will be signing the indemnity agreement and putting those assets on the line. The agreement is only as good as the party signing.
 

I'm from Missouri - You'll have to show me

Financial information to support the approval of an indemnity should consist of the most recent available balance sheet, showing the assets, liabilities and net worth of the proposed indemnitor and the profit and loss statement for the latest reporting period. We look for the detail in both sets of information. Tax returns are generally out of date, for our purposes, and usually not helpful at all.

Forewarned is Forearmed

Indemnity agreements are useful devices, but generally limited in their use to those issues that can be made to go away as a matter of right by the payment of money, such as liens and judgments. Issues that go to the heart of title are rarely the subject of indemnity agreements.

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