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Misclassifying The Insurance Policy: The Unforced Errors Of Unilateral Contract Characterization, Hazel G. Beh, Jeffrey W. Stempel

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Insurance policies are traditionally classified as unilateral or “reverse-unilateral” contracts, a characterization we find largely incorrect, with problematic consequences for adjudication of insurance coverage disputes. In addition to the general difficulties attending the unilateral classification, the concept as applied to insurance policies is not only unhelpful but incorrect. Insurance policies are more accurately viewed as bilateral contracts. In addition, the unilateral characterization of insurance policies introduces error and inconsistency into the litigation of insurance controversies. In particular, the unilateral view tends toward excessive formalism and focus on so-called “conditions” precedent to coverage, eschewing material breach analysis and encouraging needless forfeitures …