Required Insurance

What Does Required Insurance Mean?

Required insurance refers to an insurance policy that a policyholder must maintain to retain a certain status or ownership of property. Examples include health coverage mandated by the state for all citizens or property insurance required for a commercial building to legally operate.

Insuranceopedia Explains Required Insurance

There are many situations where insurance is mandatory, typically when a person or entity needs to transfer certain risks, and insurance is the only means of doing so.

For example, the state requires vehicle owners to obtain insurance before they are legally permitted to drive, and driving without insurance is illegal.

Similarly, employers must provide insurance or ensure their employees are covered for health and retirement. Failing to do so could put their business at risk.