What is Policy?
A policy is a contract that specifies the agreement between the insurer and the insured. It includes details about what risks or properties are covered, the conditions under which claims may be made, and the responsibilities of both the insurance company and the policyholder.
For personal and business insurance, policies often cover areas like homeowners insurance, auto insurance, or property insurance. A policy will detail the specific coverage limits, premiums, deductibles, and exclusions, ensuring clarity on what is or isn’t protected under the agreement.
For example, in homeowners insurance, a policy might cover damage to the home from fire or theft but exclude damage from floods unless a specific flood rider is added. The policy ensures that both the insurer and the policyholder understand their rights and obligations.
Businesses rely on policies to protect their assets and operations from risks like property damage, liability claims, or employee injuries. Without an appropriate policy, they risk significant financial loss in case of unforeseen events.