Which class of insurance requires insurable interest to exist at both inception and at the time of a loss?

The requirement for insurable interest to exist both at the inception of the insurance contract and at the time of a loss is a fundamental principle in the realm of general insurance. This principle ensures that the policyholder has a genuine stake in the subject matter of the insurance, thereby reducing the risk of moral hazard and insurance fraud.

In general insurance, such as property or liability insurance, the policyholder must have an interest in the insured item or liability, which establishes their legal right to make a claim if a loss occurs. This ensures that the contract serves its purpose of protection and risk management, promoting fairness in the insurance relationship.

In contrast, other classes of insurance, such as marine insurance or life insurance policies (including level term assurance and endowment plans), operate under different parameters. For instance, in marine insurance, insurable interest is only required at the time of loss and not necessarily at the time of the contract's inception. Similarly, life insurance typically requires insurable interest only at the outset of the contract, not at the time of the insured's death.