The concept of sacrificing a portion of a shipment in order to save the majority of cargo or human life took root in Rhodes in the first century B.C. This idea forms the basis of the law of general average still in use today, which compels merchants to split up the financial loss of dumped cargo to protect the greater whole. Marine insurance found its center at Lloyd’s of London, the global insurance marketplace that began in Edward Lloyd’s London coffee shop in 1688. Lloyd’s became the go-to spot for shipping news and marine insurance, and today its syndicates write specialty insurance policies around the world on a staggering range of risk.
Insurance and the Great Fire of London
Fires were a constant threat in 17th-century England, but the Great Fire of London in 1666 was so devastating it kindled the birth of organized insurance. The fire began in a bakery on Pudding Street and destroyed more than 13,000 houses and dozens of churches over five days. In an effort to avoid similar devastation, Nicholas Barbon, a physician, economist and builder during the city’s reconstruction, developed the idea of fire insurance. He founded The Insurance Office, the world’s first insurance company. The company hired water brigades to fight fires in the buildings it insured, which were identified by company signs called “firemarks.” Other companies formed their own firefighting teams, before municipal firefighting services were organized.