This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 350.— Can insurance on the store and goods of a trader, assigned as collateral security for money advanced for the purpose of carrying on his business and meeting his liabilities, be legally recovered?
Answer.—The policy would be voided if it were assigned to a creditor who had no insurable interest in the property, even if the company assented thereto, or if it were assigned to a creditor who had an insurable interest without the company's consent. But the insured may assign any sum of money which may become payable under the policy to his creditor. This is not an assignment of the contract of insurance. Under ordinary circumstances the creditor could >recover from the insurance company the amount of any loss so assigned.