Why is the contract of insurance described as unilateral?

The contract of insurance is described as unilateral because, in such contracts, only one party makes a promise to fulfill an obligation. In the case of an insurance policy, the insurer promises to pay for covered losses or provide certain benefits if specific events occur, while the insured pays premiums in exchange for that promise. The insurer's obligation to pay claims is contingent upon the insured maintaining the policy, but the insured does not make any comparable promise to the insurer regarding performance beyond paying the premium.

This contrasts with bilateral contracts, where both parties exchange promises. In insurance, once the policy is issued and the premium is paid, the insurer is bound to fulfill its promise when a covered event happens, while the insured’s action is limited to fulfilling payment obligations. Thus, the unilateral nature of the contract highlights the insurer's sole responsibility to provide benefits upon the occurrence of specified risks.