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!”