Insurance is a means of protection against losses in business or everyday life. It is a form of risk management primarily used to protect against the risk of loss. In business, risk management is the assessment and prioritization of risks followed by the economical application of resources to reduce, monitor and control the probability and/or impact of unfortunate events. Risk must be managed in every activity, and the goal is to ensure that uncertainty does not affect the business goal. The entity that provides insurance is an insurer, insurance company or insurance carrier. The person or entity that buys insurance is known as the insured or the policyholder. Agricultural insurance is a policy that involves paying the insured (farmer) a small amount (premium), usually as a percentage, to an insurance company (insurer) to guarantee against loss due to any peril (flood, drought), covers a certain period of time (usually no longer than one year) with a promise of compensation (reimbursement of the value of the loss) if that happens.