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 Indiana, as in other states, insurance is regulated by both state statutes and federal law. The Indiana Department of Insurance oversees the enforcement of state insurance laws and regulations, ensuring that insurance policies sold in the state meet legal requirements and that insurers fulfill their obligations to policyholders. The duty to defend obligates the insurer to provide legal defense to the insured against claims or lawsuits that fall within the scope of the insurance policy. The duty to indemnify means the insurer must pay for the losses or damages covered by the policy, up to the policy limits. Insurance policies can vary widely, including health insurance, commercial general liability (CGL), homeowners, auto, and many other types of coverage. Each type of insurance is subject to specific regulations that dictate the terms of coverage, the duties of the insurer, and the rights of the insured. It's important for policyholders to understand the terms of their insurance contracts and for insurers to adhere to the regulatory standards set by the state.