insurance
Definition
Insurance is a contract where you pay a company regular fees (called premiums) and in return they agree to cover certain financial losses if something bad happens to you or your business. Think of it as paying a little bit each month so you are not stuck paying a huge bill all at once when something goes wrong.
Example
If a customer slips and falls in your store and sues you for $50,000, your general liability insurance policy would step in and cover that cost instead of you paying it out of your own pocket.
Watch Out
Always read what your policy does NOT cover, because insurance companies carefully list their exclusions and many business owners are shocked to discover their biggest risks are not actually protected.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.