Until recently, because of the similarities between the marine insurance clauses advanced by both the Institute of London Underwriters (ILU) and the Americans Institute of Marine Underwriters, and also because of the large number of North American risks written in the London market, it seemed desirable for United States and English law to follow parallel paths. Two factors have changed the situation considerably. First, and foremost, because of a single decision of the U.S. Supreme Court, there is no longer a uniform U.S. law of marine insurance. Substituted for the previous single body of federal law is the present system of coexistence of federal law with the discrete legal regimes of the 50 individual states. Secondly, the new ILU clauses, although intending to provide substantially the same coverage as before, have introduced a format and language which is much different from previous standard clauses in either the American or London markets. Although those clauses ought to be construed similarly in either market, the first factor mitigates against that result.

Most of the law of marine insurance deals with contract construction. However, a quintessential segment of this body of law concerns the making of the marine insurance contract itself and applies regardless of the form or language of any single contract. This paper examines how that law, as it has been developing in the U.S., compares to established English law. It is in this area that both the differences and similarities are the most instructive and, perhaps, the most interesting.

The English law of marine insurance has occupied an exalted position in U.S. law. To begin with, in those jurisdictions incorporating English decisions and statutes predating ratification of the U.S. Constitution, such law has the force of law (and this applies, of course, to all branches of such law), except insofar as it has been subsequently modified by U.S. statutory or case law. Beyond that simple state of affairs, no less an authority than that of the U.S. Supreme Court has pronounced on several occasions that English decisions in the field of marine insurance are to be given great weight. As Justice Holmes said, after citing several decisions with respect to the construction of a New York War Risks policy insuring cargo on an Italian ship: “There are special reasons for keeping in harmony with the marine insurance laws of England, the great field of this business …”.2