Insurance is the equitable transfer of the risk of a loss , from one entity to another in exchange for payment
. It is a from of risk management primarily used to hedge against the risk of a .contingent , uncertain loss
An insurrer , or insurance carrier , is a company selling the insurance ; the insured , or policyholder , is the person or entity buying the insurance policy . The amount of money to be charged for a certain amount of insurance coverage is called the premium , Risk management , the practice of appraising and controlling risk , has evoled as a discrete field of study and . practice
The transaction involves the insured assuming a guaranteed and know relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a financial (personal) loss . The insured receives a contract , called the insurance policy , which
details the condition and circumstances under which the insured will be financially compensated
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