Insurable interest is a fundamental legal concept that refers to
the financial or other interest that a person has in the subject
matter of an insurance policy. In other words, it is the interest
that a person has in the property or life that is being
insured.
Aside from referring to the Civil Code elements, Maltese
jurisprudence has established the importance of common law
principles of insurable interest and utmost good faith in contracts
of insurance.
In determining what is considered as ‘insurable
interest', we can refer to English Law, namely the Marine
Insurance Act 1906. Article 5 (2) of the Act defines Insurable
Interest:
“where he stands in any legal or equitable relation to
the adventure or to any insurable property at risk therein, in
consequence of which he may benefit by the safety or due arrival of
insurable property, or may be prejudiced by its loss, or by damage
thereto, or by the detention thereof, or may incur liability in
respect thereof.”
