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Law of Insurance Contracts

Chapter 3



The law requires that a person who contracts insurance has an insurable interest in the subject-matter insured. In Feasey 1 Waller LJ demonstrated that it is difficult to define insurable interest in words which will apply in all situations. The context and the terms of the policy with which the court is concerned are important. In particular, the court will lean in favour of an insurable interest in commercial transactions.2 With this in mind he placed cases in groups. Some of these concern property and are discussed in Chapter 4. However, it is worth noting that in his “Group (2)” he put “cases where the court has defined the subject-matter as a particular life of a particular person; and where the insurance is to recover a sum on the death of that person”. In these cases there is an insurable interest in that life “where a pecuniary loss flowing from a legal obligation will or might be suffered on the death of that particular person”.3 Insurable interest in human life is considered here, in Chapter 3.

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