A contract of indemnity is defined as:

1. Section 124 of the Indian Contract Act, 1872 — a contract of indemnity is a contract by which one party promises to SAVE THE OTHER from loss caused by conduct of the promisor or any other person. 2. It is a contingent contract triggered by occurrence of loss. 3. Hence (B). _Source: ICAI BoS CA Inter Paper 2 — Indian Contract Act 1872_