General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
An insurance contract is described as unilateral because:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A unilateral contract has only one enforceable promisor — the insurer promises to pay covered benefits. The insured's duties (pay premiums, cooperate, provide proof of loss) are generally conditions that must be met to keep the promise alive, not themselves enforceable promises. If the insured stops paying premiums, the insurer is released; the insured, however, can generally sue to enforce the insurer's promise to pay benefits.
Why the other options are wrong
- B) Both parties making promises creates a bilateral contract; insurance is classically unilateral.
- C) Cancellation rights are governed by policy terms and statutes, not by the unilateral nature of the contract.
- D) Written form is a statutory requirement (CIC Section 380), unrelated to unilateral classification.
Memory hook
One promisor: the insurer promises; the insured's duties are conditions, not promises.