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Profit on goods

The plaintiff insured the profit to be made on 6,000 bags of rice being shipped from Madras to London. In this instance, the plaintiff had bought the rice in Madras for 19s per cwt and had contracted to sell the rice in London for £10s 6d per cwt. When part of the cargo had been loaded in Madras, the vessel was so damaged by severe weather that she was unable to undertake the voyage, and the plaintiff claimed on his policy of insurance for loss of expected profit.

The court ruled that the underwriters were liable under the policy, because the loss had been accasioned by a peril insured against. There was an insurable interest in the expected profit, because: (a) the goods were ready to be shipped under a valid contract; (b) there was a legal certainly that the profit would be made if the goods arrived in London.