Insurance is defined as a contract between an individual and an insurance company to safeguard resource of the individual or business against risks.
THE CONCEPT OF INSURANCE.
Insurance is based on the principle of large numbers.It is known that if an individual bears a risk on his/her own,the burden would be too much to bear.If the risk is borne a large group of people,it becomes manageable.This act of bringing people with similar risks together to share the losses from such risks is called poolingofrisks.This is the basis on which the insurance industry operates.