In the context of international logistics, where multiple players, regulations and documents are involved, a poorly managed document can lead to delays, additional costs or even legal disputes. The Letter of Indemnity (LOI) is one of those key documents that, although not always mentioned, plays a fundamental role in certain critical operations.
This type of letter is used to protect one of the parties, usually a logistic operator. This type of letter is used to protect one of the parties, usually a logistics operator, a shipping line or a freight forwarder, against possible claims or legal consequences arising from an action requested by the customer. It is a sensitive document that must be well understood, drafted accurately and used judiciously.
In this article we explain what a letter of indemnity in logistics is, in which cases it is used, how to draft it correctly, what risks it entails and what good practices should be followed. All with the aim of helping you to act with greater legal and operational security in your international shipments.
What is a letter of indemnity in logistics?
A letter of indemnity in logistics is a document by which a party (usually the shipper, consignee or cargo owner) assumes liability in writing to a third party, such as a shipping line, freight forwarder or logistics operator, for risks arising from an action requested outside the standard procedure.
In other words, this letter functions as a guarantee: it allows the execution of an exceptional action (such as releasing the goods without certain original documents) in exchange for a formal commitment to assume any legal, financial or administrative consequences that may arise from that action.
A letter of indemnity is not a substitute for a contract or insurance policy, but may be legally valid if properly drafted, signed by authorized persons and in compliance with the legal requirements of the applicable jurisdiction, although its enforceability may vary depending on the legal and regulatory context of the country or transaction.
Why is it important?
Because it allows the logistical flow to be maintained in the event of unforeseen documentary events or administrative delays, without leaving the party executing the action unprotected. In return, the signatory agrees to assume full responsibility for any possible claims or disputes.
When is a letter of indemnity used? Common practical cases
The letter of indemnity is not used in all logistical operations, but only in exceptional situations where a party needs a specific action to be performed without all the usual formal requirements.
Below, we review the most frequent cases where this document becomes essential:
📦 1. Delivery of goods without original Bill of Lading (B/L)
One of the most common scenarios is when the consignee does not yet have the original bill of lading, but needs the cargo to be released at destination. In this case, the shipping line may agree to release the goods if it receives a letter of indemnity from the customer.
🕒 Delays in commercial documentation
When import/export documents do not arrive on time for reasons beyond the customer’s control (problems with the bank, courier, customs, etc.), the LOI allows the operation to proceed without paralyzing the logistics chain.
🔧 3. Damaged merchandise or partial loss of shipment
If there is visible damage or part of the goods are missing, the customer may issue a letter of indemnity requesting that the shipment be completed or continued while the claim is being processed with the insurer.
🛃 Problems with customs documentation
Sometimes the documentation submitted does not fully comply with local customs requirements. Issuing a letter of indemnity may allow the operator to continue with the operation while the error is corrected or the issue is resolved.
⚙️ 5. Request for logistic operations outside of contract
The LOI can also be used when the customer asks the operator to perform an action not contemplated in the contract or outside the usual scope of service, such as urgent re-shipments, special handling or unplanned diversions.
In all these cases, the letter of indemnity acts as an instrument of trust and protection: it allows the operation to continue without legally binding the logistics operator against possible claims.
Parties involved in a letter of indemnity
An indemnity letter not only implies a unilateral agreement, but also establishes a formal commitment between parties with very specific roles. Understanding who is involved and what their role is is key to correctly assessing the scope of the document.
✉️ Letter sender
It is the party that requests an exceptional action and assumes the risks involved. It is usually:
–The shipper or exporter, when he wants to release the cargo before fulfilling all the documentary requirements.
–The consignee or importer, when it needs to dispose of the goods even if key documents are missing.
-Or in some cases, the cargo owner or his legal representative.
The issuer signs the LOI and agrees in writing to indemnify the receiving party for any damages resulting from its request.
🏢 Recipient of the letter
It is the person who must perform the requested action and who, without this letter, would not do so due to legal or contractual risk. It is usually:
-A shipping line, when asked to deliver without an original bill of lading.
-A freight forwarder, in case of unplanned operational or logistical changes.
-A logistics warehouse, when goods need to be released without complete documentation.
-An insurer, if special coverage is needed while an incident is being resolved.
The recipient keeps the letter as a legal backup and, in many cases, does not act until he receives a signed and validated version.
⚖️ Potentially involved third parties
In some situations, there are indirectly related third parties that may be affected by the action that is supported by an LOI:
–Banks that handle documentary credits.
–Customs that require accurate documentation.
–Final customers who receive the goods.
It is therefore essential that the content of the charter is aligned with the contractual and legal conditions of the entire supply chain.
Formal requirements of a valid indemnity letter
The validity of a letter of indemnity depends not only on the intention of the parties, but also on its clear, precise wording and compliance with the applicable legal framework. A poorly drafted LOI may be contested or even useless in the event of a dispute. Here are the key requirements it must meet.
Complete identification of the parties
It should clearly specify who is issuing the letter and to whom it is addressed, including:
-Full legal name of both parties.
-Tax address and contact information.
-Tax identification (CIF, NIF, VAT… if applicable).
-Signinglegal representative (name, position, ID card or passport).
2. Detailed description of the shipment or situation
It must include all the data that allow the identification of the logistic operation to which it refers:
-Bill of lading or transport document number.
-Nature of the goods.
-Origin and destination.
-Date of shipment or invoice number.
3. Express declaration of assumption of responsibility
This is the core of the document. It should be written clearly, including phrases such as:
“We agree to indemnify and hold harmless [Receiver’s Name] for any loss, damage or claim arising from delivery of the goods without presentation of the original bill of lading.”
4. Date and place of issue
The document should include the date it is signed and the place from which it is issued, as this may determine the applicable jurisdiction.
5. Authorized signature and company seal
It is essential that the letter be signed by a representative with legal capacity to commit the company. If possible, it is recommended to be accompanied by:
-Company seal.
-Accreditation of the signatory (as an attachment).
6. Optional but recommended
-Term of validity of the letter (if applicable).
-Jurisdiction or applicable law clause.
-Reference to insurance conditions, if any.
-Supplementary attachments (e.g. copy of the signatory’s passport or copy of the transport contract).
A properly worded letter of indemnity not only protects the recipient, but also demonstrates professionalism and reliability on the part of the sender. In international environments, moreover, it is common to draft it in English or in a bilingual format to facilitate its global acceptance.
Sample indemnity letter explained step by step
To understand how an effective letter of indemnity should be structured, a realistic model is presented below, followed by a detailed explanation of each section. This format can be adapted to different cases, but follows the standards used in international trade.
📄 Sample Letter of Indemnity (LOI)
Name of issuing company] [Name of issuing company
[Complete address] [Complete address
[Phone and e-mail] [Phone and e-mail
To the attention of:
Name of receiving company] [Name of receiving company
[Complete address] [Complete address
[City], [Date].
Subject: Letter of Indemnity – Release of goods without original Bill of Lading
Dear Sirs:
We, [Name of issuing company], acting as [exporter/importer/cargo owner], hereby request the release of the following merchandise without the presentation of the original bill of lading:
Bill of lading (B/L) No.: [number].
Type of merchandise: [brief description].
Quantity and weight: [detail].
Origin: [port of departure].
Destination: [port of arrival].
We agree to indemnify, defend and hold harmless [Name of Receiving Company], its agents and representatives against any loss, damage, cost, liability or claim which may arise directly or indirectly from this delivery without the original document.
We also declare that neither we nor any third party will take legal action against you in connection with this transaction. We assume all legal and financial liability that may arise from this.
This letter is signed with full knowledge of its legal implications.
Sincerely yours,
[Name of signatory] [Name of signatory
[Position in the company] [Position in the company] [Position in the company] [Position in the company
[Signature] [Signature
[Company seal]
🔍 Explanation of the model
Header and contact details: ensures correct identification of the parties.
Subject and purpose: state directly what the letter is being issued for.
Shipment data: uniquely identifies the affected operation.
Liability clause: the most important element. It specifies the scope of the commitment.
Waiver of Actions Clause: further protects the recipient.
Authorized signature: ensures the legal validity of the document.
Risks and responsibilities of signing an indemnification letter
Signing a letter of indemnity in logistics is not a simple administrative procedure. It implies accepting legal and economic risks that can be significant, especially when there are transport incidents or when official documents are not yet available.
The main risks and responsibilities assumed by the issuing party, as well as the implications for the recipient, are detailed below.
Direct legal liability
The company issuing the letter legally undertakes to be liable for any damage, loss or claim arising as a result of the action requested. This may include:
Third-party claims.
-Customs fines.
-Costs derived from litigation.
-Reputational damage.
A poorly drafted LOI or one issued without a proper assessment can have serious legal consequences if a conflict eventually arises.
2. Uninsured economic risk
In many cases, transport insurance policies may not cover events arising from a delivery without original documents, depending on the specific clauses of the policy and the circumstances of the transaction.
It is recommended to review with the insurer the conditions of coverage before issuing a letter of indemnity.
3. Possible international disputes
If the operation takes place between countries with different jurisdictions, there may be conflicts about the interpretation or legal validity of the letter. This is especially sensitive in intercontinental shipments, where the applicable law is not always clear or has not been specified.
4. Invalidity of the letter if it is not well formulated.
A letter without an authorized signature, without complete data or with ambiguous clauses may be considered void or ineffective in court. This is why it is essential to follow a formal and professional structure, such as the one shown in the previous section.
5. For the receiver: support, but not total shielding.
Although the LOI provides a layer of protection to the receiver (e.g., a shipping line or freight forwarder), it is not a substitute for regulatory compliance. If the receiver acts without diligence, it may still face claims for malpractice or negligence.
Signing or accepting an indemnity letter should always be an informed decision, supported by knowledge of the risks and with legal advice if necessary. At international logistics where mistakes can cost thousands of euros and compromise business relationships, this document should be treated with rigor.
Best practices for the correct use of an indemnity letter
The use of a letter of indemnity must be part of responsible and professional logistics management. It is not enough to issue the document: you must ensure that its application is consistent with the rest of the operation and with the legal requirements of the international environment.
The following are some of the best practices recommended by traders, freight forwarders and specialized consultants.
✅ 1. Involve the legal department from the beginning.
Before issuing or accepting a LOI, consult with the company’s legal team. They can review the wording, validate the scope of the commitment and adapt the document to applicable legislation (national or international).
📋 2. Verify that the signatory is duly authorized.
Make sure that the person signing the letter on behalf of the company has legal capacity and sufficient powers. In many countries, letters signed by unauthorized personnel may be considered void or challengeable.
🔒 3. Accompany the LOI with other supporting documents.
Whenever possible, attach to the letter:
-Copies of the contract of carriage.
-Documentation justifying the request.
-Accreditation of the signatory (e.g. power of attorney or appointment).
-This reinforces the seriousness and legitimacy of the application.
📞 Coordinate in advance with the logistics operator.
Never issue a letter of indemnity unilaterally. Contact the shipping line, freight forwarder or logistics provider first and confirm that they accept this type of document, under what conditions and in what format.
🗂️ 5. Archive and track all letters issued and received.
Establish an internal procedure for recording, archiving and tracking all LOIs managed by the company. This facilitates traceability and reduces risks if claims arise in the future.
🌐 6. Use models adapted to your sector or type of transport.
Not all logistics operations have the same requirements. Adapt the charter for sea, air or land transport and take into account the specific conditions of the country of origin or destination.
Applying these best practices not only reduces legal and financial risks, but also conveys professionalism and confidence to all actors in the logistics chain. A well-managed indemnity letter is a powerful tool for resolving complex situations without compromising operational safety.
Across Logistics: your integral partner in international logistics
At Across Logistics we know that efficiency in global transportation does not depend solely on the physical movement of goods. Document management, regulatory compliance and the ability to anticipate unforeseen events play a crucial role in ensuring that every operation goes smoothly.
As an international logistics operator, we offer a comprehensive solution that covers all phases of the process:
📦 Maritime transportation, air y land with global coverage and total adaptability to each type of cargo.
🛃 Customs management including tariff classification, import/export formalities and representation before authorities.
🏢 Warehousing and distributionin strategically located facilities to optimize the supply chain.
🔗 Customized logistics solutions, adapted to specific sectors and specific needs of each customer.
Our team combines operational experience with technical and legal knowledge to help you make informed decisions, reduce risks and optimize time and costs. If you need a logistics partner to support you every step of the way, Across Logistics is ready to be that strategic ally.
