Document background
The Gap Indemnity Agreement serves as a critical risk mitigation tool in Philippine financial transactions where there may be potential gaps in security coverage or payment obligations. This document type is particularly relevant in scenarios where traditional security arrangements may be insufficient or where temporary gaps in security need to be addressed. The agreement is commonly used in situations involving asset financing, property developments, or corporate lending where there might be timing gaps between the release of existing security and the creation of new security interests. The Gap Indemnity Agreement, governed by Philippine law, provides the beneficiary with a direct contractual right to claim against the indemnifier for any defined shortfalls, ensuring comprehensive protection in commercial transactions. The document typically includes detailed provisions on the scope of the indemnity, trigger events, claim procedures, and enforcement mechanisms, all structured in compliance with Philippine legal requirements.
