By redistributing risks among a large number of people, an insurance contract helps to mitigate losses from accidents insured by an individual. In return for a specified payment of premium, the insurer undertakes to pay the insured or his beneficiary a specified amount of money (i.e. sum insured / limit of liability) in the event the insured suffers a loss through the occurrence of an event (insured peril) covered by the insurance contract (as evidenced in the policy document).