DOCTRINE OF UBERRIMAE FIDEI APPLIED TO VOID MARINE INSURANCE POLICY
The doctrine of uberrimae fidei requires a marine insurance applicant to reveal every fact within his/her knowledge that is material to the risk regardless of whether or not they are asked. In SW Traders, LLC v. United Specialty Insurance Company (December 29, 2009) (.pdf), United States District Court Judge Marsha Pechman applied the doctrine to void, on summary judgment, a hull policy because the insured had not accurately disclosed the registered owner of the vessel.
Judge Pechman devoted most of her opinion to the parties’ competing recitations of the underlying events such that there appeared to be a factual dispute. But Judge Pechman seemed bothered by the fact that the true vessel owner was a Canadian citizen and had set up a shell company to serve as the nominal vessel owner in order to avoid the longstanding rule that only a U.S. citizen may own a U.S. registered vessel.
