How it all started

In the past, a disaster affecting a member of a community would frequently be alleviated by other members of that community- neighbours and friends- rallying round to help out, rebuilding the house or business, offer something from their own goods and chattels, a calf to replace the bull that was poisoned or killed by a falling tree, even just a bowl of sustenance to keep the family from starving. This was done in the assumption that when calamity struck in your own house you could expect the same treatment, the softening of the blow, by reciprocation.

And in the history of mankind there has never been a shortage of disasters and calamities! Hurricanes, earthquakes, fire and flood, famine, disease and pestilence are only the start of the catalogue of ills which have beset people from all walks of life, from the dawn of time.

Loss by fire

Of these, fire was the most frequent cause of loss of property, and was consequently one of the first areas to be subject to a more organised insurance business. In Britain, in the early 17th century, if your house was burnt down the only recourse you had was to request a ‘brief’ from a magistrate which would allow you to benefit from a public, charitable collection, if you were deemed worthy of such. Following the Great Fire of London in 1666, the Insurance Office for Houses (later to become the Fire Office) was started, to insure brick and frame houses. (This was pioneered by one Nicholas Barbon, a builder and theoretic economist, whose middle name, bizarrely, was If-Jesus-Christ-Had-Not-Died-For-Thee-Thou-Hadst-Been-Damned!)

So many small businesses had been wiped out by the all consuming fire -13,200 buildings had been destroyed - that this was a popular move. Nicholas Barbon did not profit enormously from the business, although over 5000 buildings were insured by it. The purchase of insurance was indicated by a plaque affixed to the wall of the house or business insured, which would allow the property to benefit from the local fire fighting company- if you had no plaque then they would let your house burn!

In the US, Benjamin Franklin started an insurance company which included fire insurance, and also some measures towards fire prevention. Wooden houses, for example, were refused insurance, as being a higher risk. Although life insurance and even health insurance followed soon after, public liability insurance is a more modern concept.

Insurance now

Insurance has therefore come along way since the days of neighbourly charity. Now we live in what is known as a global society, people are still benevolent, giving from their own small store to help others, but with so many deserving causes in need of charity, most people would prefer to rely on a certain return in case of a shocking loss, which has led to the rise of the insurance industry. Now there is a tailored insurance for any ill wind of fortune that you can imagine, and the assessment of risks has become an exact and complicated science.

View all Shanelle Gill's articles

---

About the Author:
The Moorhouse Insurance Group is based in Caerphilly, Wales, has been trading for more than 20 years, and has won major awards in the insurance field, including business insurance.

More Insurance articles