Insurance contract

An insurance contract is an arrangement in which one party, the insurer, accepts significant insurance risk from another party, the policyholder, to compensate the policyholder if a specific uncertain future event impacts the policyholder. A policyholder enters into an insurance contract in order to mitigate its risk of loss. Examples of insurance contracts are:

  • Insurance against property theft
  • Insurance against professional liability
  • Life insurance
  • Disability insurance
  • Fidelity bonds
  • Product warranties
  • Credit insurance

Self-insurance is not an insurance contract.

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