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What is Insurable Interest in Marine Policies?

QuestionsCategory: Asset (Fire) insuranceWhat is Insurable Interest in Marine Policies?
default avatarPlan Cover Staff asked 3 years ago
1 Answers

Best Answer

default avatarSrinivasan Mahadevan answered 2 years ago
The fundamental principe in insurance is that not all risks are insurable. They must have certain characteristics and importantly, there must be insurable interest on the part of the person insuring. 
The existence of Insurable Interest is an essential parameter in any insurance contract.  Insurable interest is the existence of a legal right to insure. This legal right can arise out of any financial relationship between the insured ( person/entity taking the insurance) and the subject matter of insurance. 
In marine insurance the subject matter of insurance could be the ship, its cargo or legal liability arising from the ownership of vessel or its cargo. Since the custody of the cargo is not with the actual owner all the time, marine insurance policies behave differently. The insurable interest also varies between the type of marine insurance taken.  In respect of marine cargo insurance the insurable interest must exists at the time of a claim.  However, in hull insurance, the shop owner has control of the management of the ship and therefore insurable interest should exist at the time of taking the policy as well.