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 Pennsylvania, insurance is regulated by both state and federal laws. The Pennsylvania Insurance Department oversees the insurance industry within the state, ensuring compliance with state statutes and regulations. Insurance policies in Pennsylvania 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 that fall within the scope of the policy coverage. The duty to indemnify requires the insurer to pay for any covered losses or damages incurred by the insured. Insurance coverage can vary widely, including policies like health insurance for medical expenses and commercial general liability (CGL) insurance for business-related claims and losses. It is important for policyholders to understand the specific terms and coverage limits of their insurance policies, as these will dictate the extent of the insurer's obligations. An attorney can provide guidance on interpreting policy language and can assist in disputes that may arise between the insured and the insurer regarding coverage.