Which principle of insurable interest is demonstrated by the case of Lucena v Craufurd [1806]?

The principle of insurable interest demonstrated by the case of Lucena v Craufurd [1806] relates to the future expectation of insurable interest. In this landmark case, the court established that a party can have an insurable interest in the future benefits that may arise from an ownership or interest in the subject matter. This means that the insured must have a legitimate stake in the subject being insured that correlates with potential future outcomes.

Lucena v Craufurd particularly illustrated that the insurable interest does not necessarily need to be present at the time of the insurance contract but can be anticipated based on future developments. This principle acknowledges that a party can insure something that they do not own yet but expect to own or benefit from in the future, reinforcing the importance of a stake in the potential risks.

The other options relate to different aspects of insurable interest that are not the focus of this specific case. For example, financial interest in the subject matter emphasizes the direct economic relationship, while conditional insurable interest refers to situations where the interest is dependent on certain conditions. Insurable interest must be explicit outlines the requirement for clarity and documentation, which while important, does not reflect the central theme of Lucena v Craufurd.