The United States Supreme Court case, United States v. Atlantic Mutual Insurance Co. et al., 1951, revolved around the issue of whether or not an insurance company could be held liable for damages to a U.S. naval vessel that was being repaired by a private shipyard insured by the defendant's company when it was damaged in a fire caused by negligence on part of the shipyard employees. The government sought recovery from both the shipyard and its insurer under maritime law principles which hold parties responsible for damage caused through their negligence while vessels are under their care (the principle known as "bailment"). The court ruled in favor of the government stating that even though there were no contractual obligations between them and Atlantic Mutual Insurance Company, they were still liable because they had issued policies covering such liabilities to negligent third parties like this particular shipyard.

The dissenting opinion in the United States v. Atlantic Mutual Insurance Co. case argued that the majority's decision to hold insurance companies liable for damages caused by enemy action during wartime was inconsistent with established legal principles and precedent. The dissent pointed out that under international law, a nation at war has no obligation to compensate its citizens for losses resulting from enemy action, and it is unreasonable to expect private insurers to bear this burden instead. Furthermore, they contended that if Congress had intended such an outcome when it enacted the War Risk Insurance Act, it would have explicitly stated so in the legislation itself rather than leaving it up to judicial interpretation. Therefore, according to this view, holding insurance companies responsible for these types of losses goes beyond what is legally required or expected of them.