why is a letter of indemnity important 
a loi can provide important protection for one party of a contract if the other party fails to fulfill its obligations in effect the loi assures that one or more parties in the contract will be held harmless that is they are not left on the hook for any negative financial consequences that the other party has caused who can issue an loi a third party generally writes a loi promising to compensate one party to a contract for any losses related to the other party frequently large institutions like insurance companies and banks take on this role 