Spuds Corporation buys from Tater Farms, Inc., a potato crop that Tater plans to plant and harvest during the next growing season. Spuds plans to sell the potatoes to Tasty Foods Restaurants. After the potatoes are planted, but before they are harvested, an insurable interest in the crop exists in

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An insurable interest exists for the person who will suffer a financial loss in case of damage or loss to the property. In this case, both Spuds and Tater have an insurable interest in the crop, as they both stand to lose money if the crop is damaged or lost before it is harvested. Tasty Foods Restaurants, however, do not have an insurable interest in the crop, as they are not involved in its cultivation and will only purchase it later.

Spuds Corporation Buys from Tater Farms, Inc