Entity: INSURANCE
Insurance is a form of risk management primarily used to hedge against the risk of a contingent or uncertain loss. It involves the transfer of risk from one party to another in exchange for a premium.
INSURANCE
Etymology
The term 'insurance' originates from the Old French word 'ensurance', which comes from the Latin 'securus', meaning 'safe'.
Definition
Insurance is a contract where one party agrees to compensate another for specified losses in exchange for a premium. It provides financial protection against unforeseen events.
Historical Context
The concept of insurance dates back to ancient civilizations, with early forms of risk-sharing found in Babylonian and Chinese trade practices.
Cultural Significance
Insurance plays a crucial role in modern economies by promoting stability and providing individuals and businesses with peace of mind.
Related Concepts
- Casualty Insurance
- Catastrophe Bonds
- Cash Value
See Also
- Glossary of Insurance Terms
A means of indemnity against a future occurrence of an uncertain event.