What type of agreement is referred to as a policy?

A policy is defined as a formal contract between an insurance company and an individual or organization, which outlines the terms and conditions of the insurance coverage provided. This contract specifies what risks are covered, the obligations of the insurer, and the rights of the insured party. Policies serve as a legal document that individuals or organizations must follow to receive benefits.

This definition clarifies that a policy is not limited to any particular sector, such as corporate entities or insurance companies alone. Instead, it applies broadly to any agreement that involves insurance coverage, which may include both individuals and organizations. This formalized agreement is essential for establishing the expectations and responsibilities of both parties, ensuring a clear understanding of the services provided and the protections afforded.