The promise of the insurer to pay a covered loss is an example of what concept in an insurance contract?

In the context of an insurance contract, the promise of the insurer to pay for a covered loss is best understood through the concept of consideration. In insurance, consideration refers to something of value that each party agrees to exchange; the insured pays a premium, while the insurer promises to provide coverage for certain risks. This reciprocal nature solidifies the contract—without consideration from both parties, there would be no binding agreement.

The other concepts mentioned serve different purposes in an insurance context. Indemnity relates to the principle of restoring the insured to the financial position they were in before the loss, ensuring they do not profit from a claim. Obligation refers more generally to the responsibilities that each party has under the contract, while liability is concerned with the insurer's legal responsibility to pay for covered losses. Understanding these distinctions emphasizes why consideration specifically captures the essence of the insurer's promise in this scenario.