What term describes a policy that primarily benefits one party in a contract?

The term that describes a policy that primarily benefits one party in a contract is a unilateral contract. In a unilateral contract, only one party makes a promise or undertakes a performance, while the other party is not obligated to take any action or make a promise in return. This is common in insurance scenarios where the insurer promises to pay a sum of money or provide a service upon a specific event occurring, such as a loss or damage, while the insured only has to meet certain conditions to claim that benefit.

In contexts like property and casualty insurance, the insurer bears the risk and the financial responsibility in the event of a claim, and the insured's primary responsibility is to pay the premiums and comply with policy conditions. Since the insurer's obligation to pay is contingent upon the occurrence of a covered event, this creates a scenario where the contract is designed to primarily benefit the party making the promises—the insurer.

Other types of contracts, such as reciprocal (where both parties have obligations), bilateral (where both parties make mutual promises), or void contracts (which have no legal effect), do not encapsulate the same dynamic of one party benefiting more significantly from the agreement.