Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Liability insurance definition

What does Liability insurance mean? Insurance that protects businesses against civil liabilities to third parties, including, in the case of employers’ liability insurance, claims by employees for work-related injury or disease. It is a market term used across multiple legal contexts rather than a single statutory definition, though particular classes are regulated by legislation (notably compulsory employers’ liability). Common forms include public liability, products liability, employers’ liability, professional indemnity and directors’ and officers’ (D&O) liability. Cover typically indemnifies damages, claimant’s costs and defence costs, subject to an indemnity limit, excess and standard exclusions (for example, deliberate acts, assumed contractual liabilities and pollution unless endorsed). Liability policies...

Insurable Interest across Marine, Property, Life, Liability, Construction and Reinsurance: Legal Tests, Timing, Consequences, Subrogation, Co-insurance, Double Insurance, Assignment and Reform

Published by a LexisNexis Insurance & Reinsurance expert

Practice notes

What is insurable interest?

This Practice Note examines insurable interest, including its role in construction and liability insurance. It also addresses insurable interest in subrogation, co-insurance and double insurance, and the Insurable Interest Bill.

It is a doctrine of insurance contract law that requires the insured to have a legally recognised relationship with the insured subject-matter. Broadly, only those who have some connection to the subject-matter of the insurance contract, by which they would be prejudiced by its loss, or may incur liability in respect of it, can insure that subject-matter. Conversely, a person who lacks such a relationship has no insurable interest and therefore cannot take out insurance on that subject-matter. The burden lies on the insured to establish that an insurable interest exists.

The rationales for requiring an insurable interest are that:

it is the characteristic of an insurable interest that distinguishes an insurance contract from wagering contracts (the ‘anti-wagering rationale’)
an insurable interest is thought to reduce the moral hazard posed by the insured taking deliberate steps to destroy the insured subject-matter to benefit from a claims payment (the ‘moral hazard rationale’)
the doctrine of insurable interest

...

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Dr Franziska Arnold-Dwyer

University College London

Dr Franziska Arnold-Dwyer is an Associate Professor of Law at University College London. Prior to that, she was a Reader in Insurance Law and Sustainability and the Director of the Insurance, Shipping and Aviation Law Institute at Queen Mary University of London. Before returning to academia, Franziska practised law in the Litigation & Dispute Resolution Department at Clifford Chance LLP and in the Litigation & Regulatory Group at DLA Piper UK LLP. She is the author of ‘'Insurance, Climate Change and the Law’ (Routledge, 2024), ‘Insurable Interest and the Law’ (Routledge, 2020) which won the BILA Book Prize 2021, and the executive editor of 'The Law of Reinsurance and England and Bermuda’ (6th ed., Sweet & Maxwell, 2024). She has published papers in leading law and insurance journals. Franziska is the deputy editor of the British Insurance Law Association Journal, regularly speaks at insurance industry events and...

Web page updated on 21/05/2026

Popular documents

Using the Judicial College Guidelines to assess general damages in personal injury claims

When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...

Tomlin orders in England and Wales: CPR guidance on drafting, confidentiality, approval, variation, enforcement, limitation, CCA issues, court-specific requirements, sample wording and precedents

This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...

Precedent: Deed of Surrender of Lease with Optional Premium, Settlement and Release, Landlord, Mortgagee and Guarantor Consents, Reimbursement and HM Land Registry Provisions (England and Wales)

Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...

Precedent Statutory Declaration: Standard Wording under the Statutory Declarations Act 1835

I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...