What Is An Indemnity Bond? Indemnity Bonds Used In General Transactions: Indemnity bonds are versatile and can also be used in situations as: Affidavit Indemnity Bond Nature A sworn statement confirming specific facts related to a property or transaction A bond that provides financial compensation if specified events occur Purpose Confirms facts but may not always be legally binding on its own Legally binding contract outlining financial obligations and compensation terms Legal Standing Used to confirm data such as ownership or terms in a property purchase Provides financial stability by paying for losses or damages caused by particular circumstances