Insurance Legal Meaning and Definition

Here is a simplified definition of the legal term Insurance.

Insurance (noun):

An agreement, also known as an insurance policy, wherein one entity (known as the insurer) promises to compensate another entity (the insured) for specific types of loss, damage, illness, or death in return for regular payments known as insurance premiums. The types of risks that can be covered by insurance encompass various aspects of life and property, such as physical disability, loss of life, house damage due to fire or theft etc. Insurance provides a financial safeguard against unpredictable or potentially severe events.