Insurance defined.—Insurance is a provision for the distribution of risks; that is to say, it is a financial provision against loss from unavoidable disasters. The protection which it affords takes the form of a guaranty to indemnify the insured if certain specified losses occur. The principle of insurance, so far as the under-taking of the obligation is concerned, is that for the payment of a certain sum the guaranty will be given to reimburse the insured. The insurer, in accepting risks, so distributes them that the sum total of all the amounts paid for this insurance protection will be sufficient to meet the losses that occur.
Insurance, then, indicates divided responsibility. This principle is introduced in most stores where a division is made between
