Concept of Insurance

The concept of insurance is simple, to protect oneself or another person against the loss money, life, goods, etc. It’s in an agreement or contract to pay money especially in case of misfortune such as accident, illness or death, examples, in motor and life insurance business and also in ordinary commercial contracts.

Many eminent insurance scholars have defined insurance in different ways which are too numerous, though there is no consensus definition to date

One interesting definition however, is the one which states that Insurance is the business which exists for the survival of other businesses. Insurance therefore is defined as a contract whereby one person, called the insurer, undertakes, in return for the agreed consideration, called the premium to pay another person, the insured, a sum of money or its equivalent, on the happening of a specified event.