For a sale-purchase transaction with an Incoterm, what determines when insurable interest transfers?

In a sale-purchase transaction governed by Incoterms, the transfer of insurable interest is determined by the point of delivery specified in the agreement between the buyer and seller. Insurable interest refers to the right of a party to insure the goods, which is usually linked to ownership and risk.

When the contract specifies a point of delivery, it clarifies when the buyer assumes risk and ownership of the goods. For instance, under specific Incoterms such as Delivered Duty Paid (DDP) or Free on Board (FOB), the details of the delivery point dictate the moment that the responsibility for insurance and other risks shifts from the seller to the buyer. Therefore, once the goods reach that designated delivery point, the buyer has an insurable interest.

The other options do not influence the transfer of insurable interest in the same direct manner. The date of shipment alone does not determine when risk or ownership is transferred, as this depends on the agreed delivery terms. Similarly, the mode of transportation or the value of goods does not dictate insurable interest; they may affect costs or risks but do not establish the precise moment of interest transfer as specified in the delivery terms.