In the 1912 case of Pittsburg Steel Company v. Baltimore Equitable Society, the U.S Supreme Court ruled in favor of Baltimore Equitable Society. The dispute arose when a ship owned by Pittsburg Steel Company sank due to an alleged defect in its construction and design while it was insured under a policy issued by Baltimore Equitable Society. The insurance company refused to pay for the loss, arguing that there were exceptions within their policy which exempted them from liability if damage or loss occurred as a result of defects known to the insured party but not disclosed at the time of insuring. The court held that since Pittsburg Steel had knowledge about potential risks associated with their vessel's condition and failed to disclose this information during negotiations for coverage, they could not claim compensation for losses incurred due to these undisclosed risks. This ruling established important precedents regarding full disclosure requirements in insurance contracts.

The dissenting opinion in the case of Pittsburg Steel Company v. Baltimore Equitable Society argued that the majority's decision failed to properly consider the nature and purpose of insurance contracts. The dissent contended that an insurer should not be held liable for losses resulting from risks it did not agree to cover, particularly when those risks were increased by actions taken by the insured party without notifying or seeking consent from the insurer. In this case, they believed that Pittsburg Steel had significantly increased its risk level by storing a large quantity of highly flammable material on its premises without informing Baltimore Equitable Society, thereby violating their contract terms. Therefore, according to this view, Baltimore Equitable should not have been required to pay out on Pittsburg Steel's claim for fire damage.