Insurance is a financial product that offers protection against the risk of financial loss. It works by transferring the risk of loss from an individual or organization to an insurance company in exchange for payment of a premium.

Insurance policies are contracts between the policyholder and the insurance company, and they specify the terms and conditions under which the policyholder will be compensated in the event of a covered loss. There are many types of insurance, such as health insurance, life insurance, property insurance, and liability insurance, each designed to protect against specific risks.

The insurance industry is heavily regulated to ensure that companies meet certain standards and are able to fulfill their obligations to policyholders.