Kenneth G. Engerrand, President and Director at Brown Sims in their Houston office. Courtesy photo
Judges have long struggled to determine what contracts are maritime. However, once an agreement has been held to be a maritime contract, the courts have generally applied principles of maritime law to the contractual dispute, “protecting the uniformity of federal maritime law.” Norfolk Southern Ry. v. James N. Kirby Pty. Ltd., 543 U.S. 14, 29 (2004). The primary exception to the uniformity rule for maritime contracts is marine insurance.
In Wilburn Boat Co. v. Fireman’s Fund Insurance Co., 348 U.S. 310 (1955), Fireman’s Fund issued a marine insurance policy to a Texas company covering its small houseboat yacht. The vessel was destroyed by fire while docked on Lake Texoma, and the insurer denied the claim based on the insured’s breaches of policy warranties that were unrelated to the fire. If marine insurance law applied, there would be no coverage because the breaches would void the policy. If Texas law applied, breaches that do not contribute to the loss would not void the policy.
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