What type of insurance contract is characterized as unilateral?

A unilateral insurance contract is one where only one party makes a legally enforceable promise. In the context of insurance, this means that the insurer promises to pay a benefit or provide coverage if a certain event occurs, such as a loss, but the insured does not have any corresponding obligation to pay unless a claim is made. This characteristic of unilateral contracts is essential in insurance because the insurer assumes the risk and provides coverage based on the contract while the insured is primarily obligated to pay premiums but is not bound by other duties until a claim occurs.

In contrast, bilateral contracts involve mutual obligations where both parties agree to fulfill certain promises. Multilateral contracts involve three or more parties, and conditional contracts are agreements that require specific conditions to be met for the contract to be binding. The essence of the unilateral nature of insurance contracts emphasizes that the insurer is the party primarily responsible for honoring the conditions of coverage once the insured fulfills their obligation of premium payment.