What role does the insurer play in a transaction?

The role of the insurer in a transaction primarily revolves around issuing the insurance policy and assuming the associated risks. When an individual or business seeks insurance, the insurer evaluates the specific risks presented by the potential insured party. Once assessed, the insurer provides a contract, known as an insurance policy, which outlines the coverage, exclusions, terms, and conditions under which the insurer agrees to indemnify the insured in the event of a loss. By doing so, the insurer takes on the financial responsibility for covered claims, effectively managing its own risk by pooling resources from multiple policyholders.

While the insurer may also engage in evaluating risks and discussing terms, their principal function is to offer the coverage through the policy document. Providing legal advice is typically outside the insurer's scope, as the role of legal counsel resides with attorneys who specialize in insurance law. The emphasis is firmly on the insurer's primary duty to provide a policy that protects against specified risks in exchange for premium payments.