Insurance is a contract with an insurer to pay the costs associated
with specified perils. A peril is a situation which results in
loss or injury that requires compensation. The question always
is who is responsible; who is liable for causing the peril or
allowing it to happen? For example, fire insurance covers the
costs resulting from damages caused by fire. Directors are responsible
for seeing to it that the assets of the company are protected.
Insurance is a way to do that.. But the directors might not be
responsible for the loss of others' property. The scope of the
coverage will determine who will be paid. It is very important
to be sure the scope of any insurance covers the range of things
for which the insured is responsible.
