Individuals and businesses establish plans to protect their personal and financial interests against events that threaten to undermine their security. This concept is risk management. The most common method of risk management is the transfer of risk from an individual or a business to an insurance company. As with other areas of law, the area of insurance has its own special concepts and terminology. It is also pointed out that when a broker deals with an applicant for insurance, the broker is, in effect, the applicant’s agent, but that an insurance agent is an agent of the insurer, not an agent of the applicant.