Insurance provides an effective safeguard against risks that may arise from uncertain or contingent future event leading to losses. Insurance equitably transfers the loss risk from one entity to other for a payment mutually agreed upon. The insurer is the company that offers insurance in exchange of a fee whereas the policyholder is the entity that purchases the risk management policy.
The appraisal and risk control through insurance coverage is done for a premium. The contract comprehensively details the circumstances and conditions which will be considered for financially compensating the insurer. Insurance comes for every form of tangible goods and intangible services.