An expense is anything that money is spent on. In the context of insurance, it typically refers to the amount of money that a policyholder has to pay in premiums to receive insurance coverage over a period of time. For example, if a business has to make three payments of $3,000 per quarter for liability insurance, its liability insurance expense for the quarter will be $9,000.
Insurance is considered an expense for businesses because they typically have to pay money through premiums to receive the insurance coverage. If the business continues to pay these expenses, then it will continue to receive insurance coverage. However, if it neglects to pay them, the coverage could be terminated.
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