Now suppose you own a jewelry shop, where you maintain impeccable security and s

Question

Now suppose you own a jewelry shop, where you maintain impeccable security and safety. You employ a very efficient security staff, and have security cameras and the latest anti-theft technology installed throughout the shop. You decide you do not need extra theft insurance. However, you notice that your competitor across the street is quite lax with his security, and you think he is just begging to be robbed of all of his inventory. You call up your insurance agent to ask if you can purchase anti-theft insurance that will pay you (rather than your competitor) if your competitor is robbed. Does this type of insurance meet the definition of “insurable interest” that you read about in DuBoff (2004)?

Explanation / Answer

This type of insurance does not meet the definition of “insurable interest” because in order for it to be "insurable interest," the ownership, possession, or direct relationship of goods. As the competitor is a separate entity not owned by you, it would not qualify as insurable interest even if you purchase the anti-theft insurance for the competitor.

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