What does indemnify mean in terms of contracting obligations?

Indemnification in the context of contracting obligations refers to a party's responsibility to compensate another party for certain damages or losses, essentially taking on those risks. This can occur in several situations, such as when one party agrees to protect another from legal liability that may arise from their actions or violations of the contract. The correct understanding aligns with the concept that to indemnify is to assume risks associated with certain liabilities or damages, thus protecting the other party from financial loss.

While the idea of co-signing may suggest a supportive or collaborative role, it does not encapsulate the broader concept of risk management inherent in indemnification. Indemnifying a party means accepting responsibility for certain potential future expenses or claims, which is not accurately reflected in simply co-signing a document or loan.