Posted on September 5, 2023 by Barry Zalma
Uberrimae Fidei
Since fraud was easy when insurance was first established the doctrine of Uberrimae Fidei was developed by insurers and governments controlling the business of insurance to avoid fraud and to instill trust in the business of insurance. Uberrimae Fidei was the adoption of an ethical basis for those who seek and those who provide insurance to the public.
The insurers recognized that it was not unusual, especially in the era of sailing ships, for a ship owner to rename his ship and report it lost at sea. Because it took a great deal of time to communicate and investigation was almost impossible when ships were lost continents away from the insurer, the doctrine of good faith and fair dealing was imposed.
Uberrimae Fidei is a special form of ethical behavior necessary to the operation of the business of insurance and was imposed on those involved in the business of insurance by the insurers, the insureds, regulators and courts.
Ethics is a process of systematically applying, using, defending, and recommending concepts of right and wrong behavior.