When does a buyer acquire an insurable interest in goods?

A buyer acquires an insurable interest in goods when the goods are identified to the contract. This means that specific goods designated in the contract can be readily associated with the buyer's purchase. Once the goods are identified, the buyer has a stake in those goods and can insure them against potential loss or damage.

Identifying goods often occurs when they are selected or marked in a way that they become part of the contract, making it clear which items the buyer has exclusive rights to. This concept is crucial in commercial transactions governed by the Uniform Commercial Code (UCC), as it protects both parties and ensures that the buyer can seek coverage in the event something happens to the goods prior to delivery.

Ordering goods does not confer an interest without identification, as the buyer may still not have rights until there is a clear connection established with specific items. Payment alone does not mean the buyer has an interest either—insurable interest relies on the goods being designated. Similarly, simply receiving delivery of goods does not affect insurable interest as it is firmly tied to the identification of the items in the agreement.