Answer :
Final answer:
Insurance contracts involve mutual promises and obligations, incorporating indemnity principles and risk management measures.
Explanation:
Insurance contracts are characterized by mutual promises and obligations between parties. They are designed to minimize moral hazard and adverse selection by including elements like deductibles and co-payments. The principle of indemnity in insurance aims to restore the insured to their pre-loss financial state, through direct and indirect coverage, while also incorporating clauses like deductibles to manage risk exposure.
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