An insured is apersonor organization whose life, health, orpropertyis covered by aninsurancepolicy. The insured'slossresults in theinsurer'sobligationto pay the proceeds of the insurance policy.
By contrast, the insurer is thepartyin an insurancecontractthatpromisesto paycompensation. The insurer is theentity, usually an insurancecompany, thatunderwritesthe insuredrisk.
An insurance policy is the insurance contract that describes theconditionsand circ*mstances under which the insurer willindemnifythe insured or other namedbeneficiaries. The person or organization purchasing the insurance is known as thepolicyholder. The policyholder and the insured are often, but not necessarily, the same person, as insurance coverage can include an insured who does not purchase insurance.
A self-insured party is one that retains its own risk instead of transferring it to a third-party by purchasing insurance coverage.
The types of risks that can be insured against are set by state insurance laws. For example, New York’s INS §1113 outlines thirty-four different types of insurances that may be issued by licensed insurers in the state.
[Last updated in June of 2023 by the Wex Definitions Team]
