(810 ILCS 5/2-501)
(from Ch. 26, par. 2-501)
Insurable interest in goods; manner of identification of goods.
(1) The buyer obtains a special property and an insurable interest in
goods by identification of existing goods as goods to which the contract
refers even though the goods so identified are non-conforming and he has an
option to return or reject them. Such identification can be made at any
time and in any manner explicitly agreed to by the parties. In the absence
of explicit agreement identification occurs
(a) when the contract is made if it is for the sale
of goods already existing and identified;
(b) if the contract is for the sale of future goods
other than those described in paragraph (c), when goods are shipped, marked or otherwise designated by the seller as goods to which the contract refers;
(c) when the crops are planted or otherwise become
growing crops or the young are conceived if the contract is for the sale of unborn young to be born within 12 months after contracting or for the sale of crops to be harvested within 12 months or the next normal harvest season after contracting whichever is longer.
(2) The seller retains an insurable interest in goods so long as title
to or any security interest in the goods remains in him and where the
identification is by the seller alone he may until default or insolvency or
notification to the buyer that the identification is final substitute other
goods for those identified.
(3) Nothing in this Section impairs any insurable interest recognized
under any other statute or rule of law.
(Source: Laws 1961, 1st SS., p. 7