Marine insurance is a highly specialized area of the law that is greatly different from conventional automobile and other type policies. Typically a pleasure boat is insured under an "all risk" policy which combines both hull coverage and protection and indemnity coverage against all risks associated with the use of a pleasure vessel. A contract of marine insurance is a maritime contract enforceable in admiralty.
Under admiralty law, applicants for marine insurance must deal in the utmost good faith with the insurance carrier. This means that every fact within the knowledge of the applicant that is material to the risk must be disclosed to the carrier, whether or not the carrier has inquired about the specific defect. It does not matter whether the failure to disclose information material to the risk is the result of a mistake, oversight or inadvertance. The failure to disclose any fact that would affect decisions on the risks assumed by the carrier voids the coverage.
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