Insurance is a mechanism that provides financial protection against the risk of loss or damage to a person, property, or business.
The risk can be in the form of an uncertain event that may or may not happen, but if it does, it could result in a financial loss.
Insurance companies use statistical and actuarial methods to calculate the likelihood of the risk occurring and the potential cost of the loss, and then offer insurance policies to individuals and organizations to transfer that risk to the insurance company.
The subject matter of insurance is not the loss or damage itself, but rather the risk of that loss or damage. Insurance helps to mitigate the financial impact of risks that are outside of an individual's or business's control.