What does it mean for an insurance policy to be unilateral?

A unilateral insurance policy means that it is a contract where only one party is obligated to perform under the terms of the agreement. In the context of insurance, this typically refers to the insurer's responsibility to provide coverage and compensation for claims made by the insured. The insured pays premiums in exchange for this coverage, but they are not legally bound to perform any actions that substantiate a claim, aside from the duty to pay those premiums.

The key characteristic of a unilateral contract is that the promise of the insurer to pay for covered losses or damages creates a binding obligation solely on the insurer. The insured benefits from this obligation without incurring reciprocal duties or promises that legally bind them to do something beyond complying with the terms set by the insurer, such as providing accurate information during the application process or reporting claims in a timely manner.

In contrast, the other options suggest shared responsibilities or obligations that do not accurately reflect the nature of a unilateral contract in insurance.