Letter of Indemnity 4
Letter of Indemnity 4 : Issued by the shipper to the carrier to secure a clean Bill of Lading for damaged goods. Usually to protect the carrier and for the purpose of avoiding collection difficulties with bank. Also, when a bank refuses to accept a foul bill of lading, the shipper (so that there shall be nothing to prevent the questionable draft from being discounted, among other reasons) may obtain a clean bill of lading. To acquire this, the shipper signs a letter of indemnity, which is an inducement to obtain the clean bill of lading through the dock or mate's receipt, given on delivery of the goods to dock or ship, showed that the shipment was damaged or in bad condition. This acts as a form of guarantee whereby the shipper accords a claim settlement against a steamship by a bill of lading holder resulting from a clean bill being issued
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