What type of contract is characterized by an agreement where the insurer's obligations depend on the occurrence of a specified event?

The type of contract characterized by an agreement where the insurer's obligations depend on the occurrence of a specified event is known as a conditional contract. In this context, the insurer only has to fulfill their obligations when certain conditions are met, such as the occurrence of a loss or damaging event. For example, in a home insurance policy, the insurer is only liable to pay damages if a covered risk, like fire or theft, actually occurs.

This conditional aspect distinguishes it from other contract types. A unilateral contract, while also relevant to insurance, describes a situation where only one party (the insurer) is obligated to act, but it does not focus on the specified event dependency. Bilateral contracts involve mutual obligations from both parties, which is not the case in a standard insurance policy. Implied contracts are generally formed by actions rather than explicit agreement and do not fit the framework of insurance contracts, which are formally written agreements. Understanding this structure is essential for grasping how insurance operates in practice.