What type of contract is referred to as "one-sided" in the insurance context?

In the context of insurance, a unilateral contract is characterized as "one-sided" because only one party—the insurer—has a legal obligation to perform. This means that once the insured pays the premium, the insurance company is bound to provide coverage as specified in the policy if a covered event occurs. The insured does not promise to do anything further beyond the payment of the premium, which is why obligations are asymmetric.

This distinguishes unilateral contracts from other types. For instance, in a bilateral contract, both parties make promises to each other, creating mutual obligations. Adhesion contracts are also distinct because they are typically drafted by one party (the insurer) and presented to the other party (the insured) on a take-it-or-leave-it basis. In contrast, conditional contracts stipulate that certain conditions must be met for the contract to be enforced; while insurance policies are also conditional in nature, the term "one-sided" specifically points to the nature of the obligations in a unilateral contract.