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 Maryland, insurance is regulated by the Maryland Insurance Administration (MIA), which enforces the insurance laws codified in the Insurance Article of the Annotated Code of Maryland. The duty to defend and the duty to indemnify are fundamental tenets of liability insurance policies in Maryland. The duty to defend obligates the insurer to provide a defense for the insured against claims that are potentially covered by the policy, even if those claims are ultimately found to be groundless, false, or fraudulent. The duty to indemnify requires the insurer to pay for any covered losses or damages that the insured is legally obligated to pay. Insurance policies in Maryland can cover various risks, including health, life, property, and liability. Each type of insurance is subject to specific regulations that dictate the terms of coverage, exclusions, and the rights and responsibilities of both insurers and insured parties. It is important for policyholders to understand the coverage, limitations, and exclusions of their policies, and they may seek the advice of an attorney if disputes arise regarding an insurer's duty to defend or indemnify under a policy.