N.Y. Uniform Commercial Code Law § 2-a-218: Insurance and Proceeds

Section 2-A-218. Insurance and Proceeds.

(1) A lessee obtains an insurable interest when existing goods are

identified to the lease contract even though the goods identified are

nonconforming and the lessee has an option to reject them.

(2) If a lessee has an insurable interest only by reason of the

lessor's identification of the goods, the lessor, until default or

insolvency or notification to the lessee that identification is final,

may substitute other goods for those identified.

(3) Notwithstanding a lessee's insurable interest under subsections

(1) and (2), the lessor retains an insurable interest until an option to

buy has been exercised by the lessee and risk of loss has passed to the

lessee.

(4) Nothing in this section impairs any insurable interest recognized

under any other statute or rule of law.

(5) The parties by agreement may determine that one or more parties

have an obligation to obtain and pay for insurance covering the goods

and by agreement may determine the beneficiary of the proceeds of the

insurance.