INSURANCE (MEANING, DEFINITION)
- Insurance is a contract. Here one party the Insurance Company called “Insurer” undertakes to indemnify specified losses suffered by the other party called “Insured” for a special consideration called “Premium”. The term of the Insurance contract is called “Insurance Policy”
- Is an arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a specified premium
- a thing providing protection against a possible eventuality.
- Definition:- A contract (policy) in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. The company pools clients' risks to make payments more affordable for the insured.
- insured is said to be "indemnified" against the loss covered in the policy
- Any risk that can be quantified can potentially be insured
- An insurance policy will set out in detail which perils are covered by the policy and which are not
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