The plain-English definition
A covered call combines owned shares with a short call option on those shares. The call seller receives a premium and accepts an obligation to sell the shares at the strike price if the option is exercised. The shares “cover” that delivery obligation; they do not protect the position from a decline in share value.
How the position behaves
If the call expires out of the money, it generally expires without assignment and the shares remain in the account. If it is exercised, the shares are sold at the strike price. Assignment can occur before expiration, and the sale price is not necessarily above the original cost of the shares.
The premium adds a fixed amount to the position's return and provides only a limited cushion against a falling share price. In exchange, the short call caps the upside above its strike: once assigned, further gains in the shares belong to the call holder rather than the original owner.
The two components matter
Looking only at the option premium hides most of the risk. The short call has a delivery obligation, while the shares carry the larger downside exposure. A complete description therefore includes the share cost, the call strike, the premium, and whether the position is closed or assigned.
Common misunderstanding
Calling the premium “income” or “rent” can make it sound independent of the shares. It is not. The premium is compensation for giving someone else part of the shares' upside while continuing to bear most of their downside. Assignment can also realize a loss when the strike is below the owner's share cost.