In the United States v. Boston Insurance Company case in 1925, the Supreme Court ruled on a dispute involving an insurance claim for a ship that was destroyed during World War I. The ship's owner had taken out war risk insurance with the Boston Insurance Company, which refused to pay when the vessel was sunk by a German submarine. The company argued that because Germany and America were not officially at war when this occurred, it did not have to honor its policy's provision covering losses due to "warlike operations." However, the court disagreed with this interpretation of events and held that while there may not have been a formal declaration of war between Germany and America at that time, they were engaged in hostilities tantamount to warfare. Therefore, sinking of ships could be considered as part of these "warlike operations," making Boston Insurance liable under their policy terms.

In the dissenting opinion for United States v. Boston Insurance Company, it was argued that the majority's ruling contradicted established legal principles regarding insurance contracts. The dissent contended that an insurer should not be held liable for losses incurred due to war risks unless such coverage is explicitly stated in the policy. In this case, there was no explicit provision covering war risks in the policies issued by Boston Insurance Company; therefore, they should not be held responsible for damages caused by World War I. Furthermore, it was pointed out that if insurers were required to cover all possible risks without clear stipulation in their policies, it would lead to a significant increase in premiums and potentially make insurance unaffordable for many people.