By Thomas H. Belknap, Jr.
March 11, 2022
Faced with the question of whether an insured’s policy should be voided for breach of policy guarantees when the insured has made misrepresentations in the application that bear no relation to the actual risk or loss claimed, the Supreme Court in Wilburn Boat concluded what “[w]Whatever the origin of the ‘literal compliance’ rule, we believe it is clear that it has not been judicially established as part of the body of federal admiralty law in this country.” Because there was no “established federal admiralty rule” governing such warranties, the Court ruled that it should instead look to state law which, as it happens, contained a provision protecting the insured from such “immaterial” violations of the guarantee.