Amount of disclosure to insurers

An owner may consider that an incident which otherwise is covered under the insurance may not result in a claim as a result of a deductible or as a result of a recovery against another party. An example is a collision in which it is clear the opponent vessel was 100% a fault for the collision.

If there are rumours or allegations or legal charges about the company which concern the owner's management or lack thereof, which are refuted by owners, many owners would not think it was necessary to disclose this.

Although it may appear to be justified why the owner should not reveal the claim incidents which he knows will not result in a claim or market rumours or charges which are false and later proven to be so, the balance of court decisions was for many years narrowly in favour of disclosing such incidents. In a recent non marine case Brotherton v Asegurador Colseguros (2003) the court of appeal confirmed that an insurer would be affected by a rumour or allegations or information as to the physical or moral risk however inaccurate this is and that the reaction of the insurer has to be judged at the time of placement. The fact that the charge or claim may later found to be groundless is not relevant to the position at the time of placement.