Why do you need a indemnity bond?
Indemnity bonds guarantee to indemnify and reimburse anyone that may experience financial loss due to the principals (the individual with the bond) poor conduct. This isn't technically a specific bond type, as the term "indemnity bond" is used when referring to commercial bonds such as auto dealer bonds, contractor license bonds, etc.
For example, if you don't abide by the laws of your state and cause financial harm to a client, a claim can be filed on your bond. The claim will initially be paid by the surety who wrote your bond, but will ultimately come back to you for reimbursement.