• An entity seeking to transfer risk (an individual, corporation, or association of any type, etc.) becomes the 'insured' party once risk is assumed by an 'insurer', the insuring party, by means of a contract, called an insurance 'policy'

• Generally, an warrant contract includes, at a minimum, the following elements: the parties (the insurer, the insured, the beneficiaries), the premium, the period of coverage, the particular loss event covered, the gang of coverage (i.e., the amount to be paid to the insured or beneficiary in the coincidence of a loss), and exclusions (events not covered)
• An insured is thus said to be "indemnified" against the destruction events covered in the policy.

Separate cover contracts (i.e., warranty policies not bundled with loans or other kinds of contracts) were invented in Genoa in the 14th century, as were provision pools backed by pledges of landed estates. These Health Insurance new indemnity contracts allowed security to be separated from investment, a separation of roles that first proved useful in marine insurance. Insurance became far more sophisticated in post-Renaissance Europe, and specialized varieties developed.