What is a policy?

The definition of a policy is the document in which the insurance contract and the obligations and rights that both the insurance company and the insured must assume, which are the two parties involved in these contracts.

In said documents, the persons, instruments or elements that are going to be subject to this protection are set out in detail, in addition to setting the guarantees and indemnities in the event of a claim or incident that damages the person or our property.

Policies are trained to protect a wide variety of risks, such as accidents, fires, the death of a person, etc. Before hiring, the interested party must be correctly informed about which is the best option to protect their property. That way you can safeguard some risk issues and exclude others that you consider less important.

Types of policies

The policy concept is usually linked above all to the field of insurance and accounting, mainly:

  • Insurance policy: this is a legal document used to certify the benefits to which the insured is entitled when paying a premium for insurance coverage. It establishes the terms through which the insurance company undertakes to compensate for damage and pay the corresponding compensation when an eventuality included in the contract is verified. They can be policies against accidents, theft, illness, life, travel, etc.
  • Accounting policies: refers to the document in which the different accounting operations of a company or person are recorded. It can be of several kinds: daily, expenses or income.
  • Credit card: it is the document in which a financial institution grants a person or company the right to borrow from it, and in which it sets out all the agreements and clauses of that contract.

Parts of the policy

The policy is made up of three essential parts, such as the general conditions, the particular conditions and the special conditions.

  • General conditions: they include the set of clauses established by the insurer to regulate the insurance contracts that are issued within it.
  • Specific conditions: they deal with the specific aspects of each policy and that will differentiate them from the rest.
  • Special conditions: the different clauses that result from the application to each policy.

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