Definition: Equity insurance refers to a type of financial protection insurance that provides coverage for an investor or borrower who has purchased securities or other investments with the expectation of receiving a profit, but in cases where the investment does not deliver on its potential profits due to unforeseen circumstances such as economic downturns or market fluctuations. This type of insurance typically requires the insured to take on some level of risk and is intended to protect the investor from the loss that can occur if their investments do not perform as expected. The definition for equity insurance may include a few key elements: 1. Securities purchased: Equity insurance may cover securities bought by an investor, such as stocks or bonds. 2. Profit expectation: The insurer will be required to assume some level of risk in order to provide coverage against the loss that could occur if the investment does not perform well. 3. Loss potential: The insurer must also be able to make a profit on the investment and take out the necessary insurance to cover any losses incurred. This type of insurance is designed to protect investors from the financial risks associated with investments, and can help mitigate the impact of market volatility or economic downturns that could potentially cause significant losses for an investor.