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 Michigan, insurance is regulated by both state statutes and federal law. The Michigan Department of Insurance and Financial Services (DIFS) oversees the insurance industry within the state, ensuring compliance with state laws and regulations. Insurance policies in Michigan are contracts between the insurer and the insured, where the insurer has two primary legal obligations: the duty to defend and the duty to indemnify. The duty to defend obligates the insurer to provide legal defense to the insured against claims or lawsuits covered by the policy, while the duty to indemnify requires the insurer to pay for the losses or damages as specified in the insurance policy. Insurance coverage can vary widely, including health insurance for medical expenses, commercial general liability (CGL) insurance for business-related claims, and many other types of insurance to protect against specific risks. It is important for policyholders to understand the terms and coverage limits of their insurance policies, and they may consult with an attorney for guidance on insurance matters.