An insurance policy is a contract that defines the obligations of both the insured and the insurer. Most insurance policies contain terms that are hard to understand and policies are often written in a confusing manner. Taking the time to understand your policies is well worth the effort. Besides providing coverage, policies also assign certain responsibilities to the insured. Your failure to meet these obligations may impair the coverage your organization relies on for protection.

Every insurance policy has five parts: declarations, insuring agreements,definitions, exclusions and conditions. Many policies contain a sixth part:endorsements. Use these sections as guideposts in reviewing the policies. Examine each part to identify its key provisions and requirements.