means A definite course of action or set of principles adopted by a government, organization, or individual to guide decisions (and, in insurance, the contract itself).

from From the Old French 'policie,' meaning civil administration or government, which traces back to Latin 'politia,' a borrowing of Greek 'politeia' — citizenship, the running of a city-state — built on 'polis,' the city, the same root that gives us 'politics' and 'police.' The insurance sense, oddly, may come from a different door: a separate Italian word 'polizza' (a receipt or certificate), possibly from Latin 'apodissa' via Greek 'apodeixis,' meaning proof. Two streams that look identical in English but likely sprang from different springs.