Insurable Interest

Summary of Insurable Interest

An interest such that, should an insured peril occur, the insured party would suffer an economic loss.

(Main Author: William J. Miller)

Insurable Interest in International Trade

Meaning of Insurable Interest, according to the Dictionary of International Trade (Global Negotiator): A principle of insurance that in order to obtain coverage on a shipment, a party must have a legal relationship to either the transportation (entitlement to freight cost or wages) or to the insurable property, the carrier itself, or the cargo. This means that if the insurable property if safe or arrives safely at its destination, the party itself will benefit. Conversely, if there is loss or damage or detention to the insurable property, the party will suffer some detriment. Typical parties with insurable interests include those responsible for the condition of the goods while in transit, unpaid sellers, and buyers who have prepaid. See also party at risk.