Which statement is true regarding an Indemnity Agreement?

An Indemnity Agreement, in the context of surety bonds, serves as a contract wherein the indemnitor agrees to compensate the surety for any losses or expenses incurred as a result of the bond. This type of agreement is crucial because it provides the surety with a measure of security, ensuring that they can recover costs associated with claims made against the bond.

The assertion that an Indemnity Agreement is not valid for a year aligns with the nature of such agreements. These agreements typically endure throughout the life of the bond and may extend beyond a one-year time frame, meaning that a one-year validity would not adequately address the potential liabilities the surety might face.

While some agreements may specify a certain duration, the very premise of an Indemnity Agreement inherently supports long-term responsibility and coverage, especially in the construction and surety bond industries where projects can span multiple years. Therefore, the characteristic of being valid for only a year does not reflect the comprehensive nature expected from Indemnity Agreements, which is why this statement is considered true in the given context.