Quora Answer: If a Stock Crashes, is There Insurance?

The following is my answer to a Quora question: “If a stock crashes, is there insurance?”

How do we insure against a stock crash?  What are we insuring?  You cannot insure against how the market values equity, except by hedging your investment, which functions as a limited form of insurance against loss.  You can, however, insure the company itself against specific liabilities, such as a massive payout due to an accident, legal action, and loss through accident, or perhaps, political exposure.  This does not insure the stock, but insures the business itself.  That payout can then be used to buy back some of the stock to protect leverage, or, at least mitigate the loss.