Insurance generally refers to a legally enforceable contract—known as an insurance policy—in which an insurance company (the insurer) agrees to (1) defend the person or entity who purchased the policy (the insured) against future claims or lawsuits; and (2) pay for losses (usually financial) that are covered under the written terms of the insurance policy.

These two primary legal obligations of an insurer under a liability insurance policy are known as the duty to defend and the duty to indemnify.

Insurance may be purchased to cover a wide range of future claims or losses—ranging from health insurance to pay future medical expenses, to commercial general liability (CGL) to cover future claims and losses incurred by a business.

In Arizona, insurance is regulated by state statutes and overseen by the Arizona Department of Insurance and Financial Institutions. The duty to defend and the duty to indemnify are fundamental obligations of an insurer under a liability insurance policy. The duty to defend requires the insurer to provide an attorney to defend the insured against claims or lawsuits that fall within the scope of the insurance coverage. The duty to indemnify means the insurer must pay for any covered losses or damages that the insured is legally obligated to pay. Insurance policies in Arizona can cover various risks, including health insurance for medical expenses and commercial general liability (CGL) insurance for business-related claims and losses. Policyholders in Arizona have the right to expect their insurers to honor these duties in accordance with the terms of their insurance contracts, and disputes over coverage may be litigated in Arizona courts or resolved through alternative dispute resolution methods.