Justices’ Maritime Insurance Ruling Retains Tilted Status Quo

The US Supreme Court ruled that an insurer can enforce choice-of-law provisions in a marine insurance policy it issued to the owner of a yacht, upholding existing practices that give insurers an advantage over policyholders. In the unanimous decision, the justices rejected the yacht owners’ arguments that the courts should consider the interests of the states whose laws are being displaced, siding instead with the insurer. Anthony Bartell spoke with Law360 about the case and said that maritime insurers largely present their contracts on a take-it-or-leave-it basis, and even sophisticated policyholders rarely negotiate terms such as a choice-of-law provision. “To the extent the court was purporting to uphold the freedom of contract, it was misguided here because that freedom simply doesn’t exist in the insurance policy context,” Anthony said. “Anyone who has practiced in the insurance coverage area for more than a couple of years knows how the game is played, and we know why New York is chosen, and we know that the policyholder has no say in choosing New York as opposed to any other state.”