In what way is an insurance contract unilateral?

An insurance contract is considered unilateral because it involves a promise made specifically by one party—the insurer—wherein the insured does not make a similar enforceable promise. In a unilateral contract, the insurer agrees to provide coverage and pay claims under the terms of the policy, while the insured pays premiums. The insurer’s obligation to fulfill its promise to cover losses becomes enforceable as soon as the insured pays the premium, regardless of whether the insured fulfills any further obligations, such as reporting a claim or adhering to policy conditions.

This understanding highlights why the other options do not accurately reflect the nature of a unilateral insurance contract. The correct characterization emphasizes the one-sided nature of the promise made by the insurer, underscoring that it is the insurer alone who is legally bound by the commitments outlined in the policy upon accepting the premium. This distinction is crucial for understanding the legal implications and dynamics of insurance agreements.