Father of Insurance

Since this is the first of many of Ben’s insurance articles, a brief explanation of insurance history will help you to understand when and how this Vital business started.

According to ancient world records the Babylonians developed a system which dates back to 1750 BC and was practiced by early Mediterranean sailing merchants.  If a merchant received a loan to fund his shipment, he would pay the lender an additional sum in exchange for the lender’s guarantee to cancel the loan should the shipment be stolen.  Many years later, the inhabitants of Rhodes invented the concept of the ‘general average”.  Merchants whose goods were being shipped together would pay a proportionally divided premium which would be used to reimburse any merchant whose goods were lost during a storm or sinkage.

The Greeks and Romans introduced the origins of health and life insurance around 600AD when they organized guilds called “benevolent societies” which cared for the families and paid funeral expenses of members upon death.

Ben Franklin Helps Set Standards

Benjamin Franklin helped to popularize and make standard the practice of insurance, particularly against fire in the form of perpetual insurance.  In 1752 he founded the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire.  Ben’s company was the first to make contributions toward fire prevention.  Not only did his company warn against certain fire hazards, it refused to insure certain buildings where the risk of fire was too great, such as all wooden houses

The sale of life insurance in the U.S. began in the late 1760s.  The Presbyterian Synods in Philadelphia and New York created the Corporation for Relief of Poor and Distressed Widows and Children of Presbyterian Ministers in 1759; Episcopalian priests organized a similar fund in 1769.  Between 1787 and 1837 more than two dozen life insurance companies were started but fewer than a half a dozen survived.

Prior to the American Civil War, many insurance companies in the United States insured the lives of slaves for their owners.  A record search found that Nautilus Insurance sold 485 slaveholder life insurance policies during a two-year period in the 1840s.  Apparently the insurance company trustees voted to end the sale of such policies 15 years before the Emancipation Proclamation.

As you can see, Investment Protection better known as Insurance has been made available throughout the world for centuries.  Insurance is a promise of compensation for specific potential future losses in exchange for a periodic payment and is definitely worth the expense in the event of a loss.

Until next time… stay informed and stay insured!

Jan Vitale, your Investment Protector

Vital Enterprises, LLC