The Insurance Fund is a protective reserve used in futures trading to cover losses from liquidated positions when they cannot be fully closed at the bankruptcy price. Its purpose is to absorb these losses so that users are less likely to be affected by extreme market swings. When the Insurance Fund is sufficient, liquidations are handled smoothly without impacting other traders. Only if the fund is depleted does the system activate additional protections, such as Auto-Deleveraging, to maintain platform stability and protect users.