Marine Insurance Lawyer
Uberrima fides is a Latin term meaning “utmost good faith.” It is the name of a legal doctrine which governs marine insurance contracts. This means that all parties to a marine insurance contract must deal in good faith, making a full declaration of all facts in the insurance proposal. For the insured, it means that he must reveal in the application process the exact nature and potential of the risks that he transfers to the insurer. A higher duty is exacted from parties to an insurance contract than from parties to most other contracts, in order to ensure the disclosure of all material facts, so that the contract may reflect accurately the actual risk being undertaken by both parties. This highest duty is found in the marine insurance setting; for example, the State of Florida has a slightly more liberal and fair statute which is more forgiving for inadvertent, non-material misrepresentations in an insurance application or renewal.
The concept of Uberrima fides was famously stated by Lord Mansfield in the seminal case, Carter v Boehm, 97 ER 1162, 1164 (1766):
“Insurance is a contract of speculation…. The special facts, upon which the contingent chance is to be computed, lie most commonly in the knowledge of the insured only; the under-writer trusts to his representation, and proceeds upon confidence that he does not keep back any circumstances in his knowledge, to mislead the under-writer into a belief that the circumstance does not exist…. Good faith forbids either party by concealing what he privately knows, to draw the other into a bargain from his ignorance of that fact, and his believing the contrary.”
A variation, but with the same meaning is “Uberrimae fidei,” appropriately, the motto of Lloyd’s of London, but I see it used by them deftly as both a sword and a shield. “Caveat emptor!”“My 80 ft., six month old yacht sank off of Cuba, and when my captain and crew made it to Cuba’s shore, they were put in prison. My big marine insurance company of London abandoned me, claiming there was a mistake in my insurance application, so there was no coverage, or that my sunken boat broke apart because of a design or manufacturer’s defect, so there was no coverage, or I was a lying Italian. (No kidding; how’s that for racial profiling?) They had no real idea what their defense was; they just didn’t want to pay. Worst of all, while I thought they were negotiating with me in good faith, they snuck into federal court and filed a declaratory action in admiralty, so they could beat me to filing in a court system that offered no jury (I would have filed in state court with a jury). I turned to Peter Commette, and two years later, after numerous depositions and meetings in Florida, England and mainland Europe, we settled the case … for more than the insured value of my boat! Thank you, Peter.”
Luigi (last name withheld because of a confidential settlement)