Letter of Indemnity (LOI)

What is a Letter of indemnity in shipping?

A letter of indemnity is a document exempting one party from liability to any claim that may arise from the other party. In shipping, when goods are being transported through a dangerous route, the carrier may issue a letter of indemnity against possible damage to the shipper's goods. If this happens, the carrier will not be liable for any damage that may occur to the shipment when passing through the route.