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18 MN May 2011 LEGAL Historically, and even into the pres- ent day, marine insurance underwriters rarely have the opportunity to them- selves inspect, or even see a written marine survey report on a vessel they are asked to consider insuring. Commercial vessels, in particular, are, if they are working, constantly on the move, at sea, in transit on the rivers, or in distant ports. They are rarely tied-up for weeks or months and available for an underwriter or surveyor to inspect them. This is why the general maritime law and the law of many U.S. states has developed the doctrine of uberrimae fidei, translatable to “the duty of utmost good faith.” It means the vessel owner, the potential insured, has a legal duty to not only truthfully answer the insurer’s questions about their vessel, but also a duty to come forward and voluntarily disclose other material features of their vessel or its operation which may impact the risk the insurer is being asked to assume. The doctrine of uberrimae fidei is grounded in the con- cept that as between insurer and insured, the insured is in a better position to know the risks associated with insur- ing the vessel. The idea is the marine insurer should be entitled to rely on the vessel owner to tell the truth about their vessel, including features such as its key equipment, its maximum speed or the horsepower of its engines, its purchase price, in which waters it will be operated, or who will man or captain it, to enable the marine insurer to decide if it wishes to take on the risk of insuring the ves- sel, and if so, what dollar limits it will offer and agree to pay in the event of a loss, and in exchange for what amount of premium dollar. The failure of the insured to be candid with the marine Utmost Good Faith Marine Insurance By Leonardo Montoya USCG Photo of grounded vessel
