Where a contract of indemnity is to indemnity a person against liability to a third party (e.g. under a liability insurance policy), the general modern rule is that the limitation period starts to run when the indemnifying party’s liability is established by judgment, arbitration or binding settlement. However, that general rule is subject to the construction of the contract of indemnity. This may mean that the indemnifying party is liable as soon as the indemnified party is liable (that is, even before any establishing of that liability by, for example, judgment). At the other extreme, the contract may on its true construction provide that the indemnity is conditional on actual payment has been made.