Interest insured, also called insurable interest, is the financial stake a person or business has in insured goods, cargo, property, or equipment. In shipping and cargo insurance, it means the insured party would suffer a real financial loss if the shipment were damaged, lost, stolen, or destroyed. Insurable interest may belong to the buyer, seller, cargo owner, lender, or another party depending on the sales terms, title transfer, contract, and insurance arrangement. To make a valid cargo insurance claim, the insured must have a financial stake in the safe arrival of the goods at the time of the loss.
- Sellers have insurable interest until risk transfers to the buyer under the agreed Incoterms
- Buyers have insurable interest from the moment risk transfers to them
- Banks holding a letter of credit have insurable interest as conditional owners
- Freight forwarders arranging insurance on behalf of clients must act as agents of the cargo owner
Related terms: All-Risk Coverage, Declared Value.
