Insurance companies
These companies are businesses that collect premiums and pay claims.
To remain profitable, they must take in more than they pay out.
These companies are businesses that collect premiums and pay claims.
To remain profitable, they must take in more than they pay out.
Just as individuals purchase home and auto insurance to manage risk, companies purchase insurance to manage legal and financial exposure. Policies commonly cover claims involving errors, negligence, or misconduct, including defense costs, settlements, awards, and judgments.
When a claim is filed, the insurer typically provides and funds the legal defense.
Because claim payments affect profitability, insurers defend claims to minimize payouts and litigation costs.
As a result, disputes proceed within a structure where insurance finances both the defense and potential payouts, while the opposing party often bears its own risk and expense.
Insurance manages risk. It does not manage truth.
