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Insights show shifting legal strategies and evolving insurer responses post‑decision.
Published on February 12, 2026
Katherine Christodoulatos, Senior Director, Claims
Nicholas Butovich, Director, Associate General Counsel, Coverage Counsel
Lillian Haley, Associate Legal Counsel
The US Supreme Court’s unanimous decision in Great Lakes Insurance SE v. Raiders Retreat Realty Co., 601 US 65 (2024) affirmed that choice of law provisions in maritime contracts are presumptively enforceable under federal maritime law. In its decision, hailed as a win for marine insurers, the Court sought to enhance the “protection of maritime commerce” (601 US at 72), upholding the importance of uniformity of maritime law nationwide.
The initial published commentary across the marine industry was that, by affirming predictability as to the choice of law in marine contracts, the decision would: (1) promote certainty as to applicable law; (2) deter forum shopping; (3) reduce the cost of litigation and legal fees spent in disputing jurisdiction; and (4) generally increase the availability of marine insurance.
As we marked the anniversary of the decision, we turned to marine insurance professionals across the industry to assess whether this commentary holds true and uncovered insights into the developing impact of Great Lakes.
The legal journey to the decision
The legal dispute arose when a vessel owned by Raiders Retreat Realty Co. (“Raiders”), a Pennsylvania company, ran aground in Florida. Great Lakes Insurance SE (“Great Lakes”), the insurer, denied Raiders’s claim because of its failure to maintain the vessel’s fire suppression system, which contravened the policy’s express warranty, though the breach was unrelated to the loss.
Great Lakes pursued a declaratory judgment action in the US District Court for the Eastern District of Pennsylvania, seeking a ruling that New York law applied and that the policy afforded no coverage due to Raiders’ breach of the express warranty. The District Court held that choice of law provisions in maritime contracts are presumptively valid, rejecting Raiders’ argument that “applying New York law would frustrate Pennsylvania's ‘strong public policy’ of punishing insurers who deny coverage in bad faith.” Great Lakes Ins. SE v. Raiders Retreat Realty Co., 521 F. Supp. 3d 580, 586 (E.D. Pa. 2021).
Raiders appealed, and the US Court of Appeals for the Third Circuit vacated and remanded the District Court’s judgment. Citing the Supreme Court’s decision in The Bremen v. Zapata Off-Shore Co., 407 US 1 (1972), the Third Circuit identified exceptions to the principle that choice of law provisions in maritime contracts are presumptively enforceable.
This holding created a split in the appellate courts. Thereafter, the Supreme Court granted certiorari to address the issue, which led to its unanimous ruling.
Our interviews confirm the decision’s developing impact and identified four significant themes:
- Review or modification of choice of law provisions amongst insurers
- Impact on bad faith exposure
- Predictability and underwriting certainty
- Opportunity for competitive differentiation in the market
Enforceability of choice of law provisions may also give insurers the opportunity to offer more flexibility in their policies.
Some insurers have shifted toward New York choice of law
Given the limited time since Great Lakes, many of our sources have not perceived a notable decline in choice of law as a litigated issue. They have, however, seen a clear movement by insurers to review and modify their choice of law provisions, including some insurers who have incorporated New York as their choice of law.
New York law has been considered favorable to marine insurers primarily because it requires strict compliance with warranties, even if a breach of those warranties was not causally related to the loss. Further, insurers may have less exposure to bad faith in New York than in other states.
Impact on bad faith exposure
James Mercante of Gallo Vitucci Klar LLP believes that the enforceability of choice of law provisions may impact other issues beyond coverage, such as bad faith claims. Mercante commented that he does “not see [Great Lakes] as a lawsuit preventer, as much as an exposure minimizer.”
However, the Supreme Court did not specifically address whether a choice of law provision would apply to issues beyond the scope of the insuring agreement. Whether a given choice of law provision ultimately applies to bad faith will likely depend on the chosen jurisdiction and the language of that choice of law provision. According to Michael Goldman of The Goldman Maritime Law Group, while many lower courts have spoken on this issue, “the only points to be concerned about are to make sure that the chosen law is reasonable and that [the] text of the clause is sufficiently clear.”
Predictability improves underwriting certainty
According to several of our sources, enforcing choice of law provisions may also provide more predictability in the legal framework for insurers. For instance, applying a specific choice of law allows an insurer to anticipate how policy provisions like warranties and exclusions will be interpreted, which may ultimately lead to more consistent claims handling. Indeed, if an insurer chooses a body of law that does not require the warranty provision’s causal connection to a loss to deny a claim, then that insurer can expect stricter compliance with policy conditions and warranties.
On this point, Goldman further suggested that insurers may now have the ability to positively impact the industry by implementing safety warranties and conditions that must be adhered to in order for coverage to apply, even when the loss is not causally connected to the breach.
While acknowledging the need for compliance with policy warranties, Chris Coleman of Oversea Yacht Insurance observed that strict compliance could cause undue burden on an insured who ultimately lacks bargaining power in the law selected. Coleman predicted that courts may apply heightened scrutiny when considering warranty breaches that lack a causal connection to the loss to counteract potentially harsh results for the insured.
With predictability also comes greater ability for an underwriting department to evaluate and write risks. Samuel Blatchley of Eckland & Blando LLP opined that the Great Lakes decision will allow underwriters to have more certainty in their risk assessment. Knowing what body of law will apply to disputes at the underwriting stage provides more certainty on knowing how a claim will be adjudicated, which in turn results in more accurate pricing.
Great Lakes has seemingly brought greater clarity and predictability to the industry.
Choice of law becomes a competitive tool
Enforceability of choice of law provisions may also give insurers the opportunity to offer more flexibility in their policies. According to Jason Minkin of BatesCarey LLP, while some insurers will likely continue to include or even add choice of law provisions in their policies, other insurers will see an opportunity to differentiate themselves from the competition by offering policies without such provisions. Some may even add provisions choosing law that is ostensibly deemed more favorable to insureds.
A few practitioners offered words of caution to insurers. For instance, Brandon Thibodeaux of Frilot LLC posits that insurers may need to continually review the law of chosen jurisdictions, such as New York, to ensure that it has not changed significantly or unexpectedly. Moreover, he suggests insurers be mindful of jurisdictions that may be partial to insureds, particularly with respect to matters that might not fall within the purview of Great Lakes.
In the wake of Great Lakes
While the full impact of the decision is still unfolding, Great Lakes has seemingly brought greater clarity and predictability to the industry. The decision has already prompted some insurers to reassess their choice of law provisions, and there appears to be a trend toward choosing jurisdictions, like New York, that offer strict compliance with policy conditions and warranties, as well as potential limitations to bad faith exposure. Still, insurers must remain vigilant about changes in selected jurisdictions and should consider their choice in terms of the strategic flexibility it may afford them in their own competitive context.
As the industry continues to adapt, Great Lakes clearly marks a pivotal event in shaping the future of marine insurance.
The authors asked policyholder counsel for comment for this article. However, none responded.