Page 20: of Marine News Magazine (May 2011)

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20 MN May 2011

LEGAL

Quality • On Time • Design Support

Senesco Marine, on Narragansett Bay in RI, has 28 acres for new construction, a 1200’ pier for topside work, and a 4500 ton capacity drydock.

Senesco Marine has a proven track record in: • New Construction • Conversion • Repair 10 MacNaught Street

North Kingston, RI 02852-7414

Tel: 401-295-0373

Mike Foster - Vice President and

General Manager

Email: [email protected]

Tom Johnson – Vice President Business

Development

Email: [email protected]

Tel: (713) 260-9629 • Fax: (713) 260-9602 www.senescomarine.com insurer’s option; an insured, making application for insur- ance, is bound by all the representations and warranties contained in the application even though he does not answer them specifically; having signed the application, he adopts and ratifies all statements appearing above his sig- nature.” • “there exists a special relationship between an insured and an insurer requiring the parties to act with the utmost good faith. In the making of a contract for insurance, the parties are held to the utmost of good faith; the assured is presumed to know the condition of the property, and the dangers attending it; and is not at liberty to withhold information on an important and material matter known to increase the risk.” • “A party's intent to conceal, or lack thereof, is irrele- vant to the uberrimae fidei analysis … a material misrepre- sentation, even if it is a result of mistake, accident, or for- getfulness, is attended with the rigorous consequences that the policy never attaches and is void …. The only thing that matters is the existence of a material misrepresentation.”

Here are examples of misrepresentations insureds have made which courts have found sufficiently material to allow the marine insurer to void the policy from incep- tion: • Misrepresenting the purchase price of a yacht as $600,000 when it was only $400,000. • Failure to disclose on insurance application details of a prior loss that the vessel had previously sank in ten feet of water. • Insured’s agent checked “no” on application question about whether boat was to be used for racing and the boat was later damaged while insured was attempting to quali- fy for a race. • Failure of insured to disclose true age of vessel. • Representing on insurance application that cruising limits would be “Inland Lakes and Rivers” as opposed to the more expensive “Coastal Waters” coverage, then oper- ating vessel in coastal waters.

If you are applying for marine insurance, even on a pleasure boat, tell the insurer, directly or through your insurance agent or broker, the whole truth. Answer all questions on the insurance application fully and accurate- ly. If you believe there are features of your vessel or its operation which are unusual or which may increase the risk to the insurer of insuring your vessel, come forward and in writing disclose these to the insurer. If you fail to follow these directives, the consequences may be severe: your policy may be voided from inception and there will be no coverage for a loss, be it a personal injury, a death, a collision, a fire, or a sinking.

Fred Goldsmith, formerly general counsel of one of the coun- try’s largest tug operators, is licensed in PA, WV, OH, and TX, and practices admiralty & maritime, railroad, oilfield, per- sonal injury, motorcycle, and insurance coverage litigation with Pittsburgh-based Goldsmith & Ogrodowski, LLC (www.golawllc.com). You can reach him at [email protected] or (877) 404-6529.