Insurance policies are considered unilateral because they:

Insurance policies are considered unilateral because they contain only the insurer's promise. In a unilateral contract, only one party—the insurer—makes a binding promise to pay benefits or cover losses, while the insured’s obligations (such as paying premiums) are not legally enforceable in the same way. The insurer’s promise is contingent upon the insured fulfilling their duty to pay premiums, but the insured does not provide a promise that is legally enforceable in the same context; instead, they are expected to comply with the terms and conditions set forth in the policy.

This characteristic distinguishing a unilateral insurance contract is important as it highlights the nature of the agreement between the insurer and the insured, emphasizing that only one party is making a legally binding commitment to perform. Understanding the unilateral nature of insurance contracts is crucial in recognizing how obligations are formed within these agreements, which helps clarify various scenarios in insurance claims and coverage disputes.