Indemnification: Basic Insurance Definitions

Indemnity, Policyowner, & Risk Definitions
Indemnity and Other Insurance Basic Concepts Defined

Indemnification - This is the concept of restoring individuals to the same financial position they were at before a loss occurred. Indemnification is the central idea behind the concept of insurance.

Insurer - Another name for an insurance company.

Applicant - The individual who applies for insurance.

Insured - An individual who is insured or has insurance taken out on or for them for a specific interest.

Policyowner - The person who:

Insurable Risk

Risk - Risk is the probability or uncertainty that a loss will occur. It may be financial or non-financial; it may be speculative or pure. In insurance, the greater the risk, or chance for loss, the greater will be the premium charged to cover it.

Elements of Insurable Risks - To be considered insurable, a risk must be:

See also:

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