'Insurance', in law and economics, is a form of risk management primarily used
to hedge against the risk of a contingent loss. Insurance is defined as the
equitable transfer of the risk of a loss, from one entity to another, in
exchange for a premium. An 'insurer' is a company selling the insurance. The '
insurance rate' is a factor used to determine the amount, called the 'premium',
to be charged for a certain amount of insurance coverage. Risk management, the
practice of appraising and controlling risk, has evolved as a discrete field of
study and practice.
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