ASSURANCES among merchants, I believe, may plead prescription, and have
been of use time out of mind in trade, though perhaps never so much a
trade as now.
It is a compact among merchants. Its beginning being an accident to
trade, and arose from the disease of men’s tempers, who, having run
larger adventures in a single bottom than afterwards they found
convenient, grew fearful and uneasy; and discovering their uneasiness to
others, who perhaps had no effects in the same vessel, they offer to bear
part of the hazard for part of the profit: convenience made this a
custom, and custom brought it into a method, till at last it becomes a
trade.
I cannot question the lawfulness of it, since all risk in trade is for
gain, and when I am necessitated to have a greater cargo of goods in such
or such a bottom than my stock can afford to lose, another may surely
offer to go a part with me; and as it is just if I give another part of
the gain, he should run part of the risk, so it is as just that if he
runs part of my risk, he should have part of the gain. Some object the
disparity of the premium to the hazard, when the insurer runs the risk of
£100 on the seas from Jamaica to London for 40s., which, say they, is
preposterous and unequal. Though this objection is hardly worth
answering to men of business, yet it looks something fair to them that
know no better; and for the information of such, I trouble the reader
with a few heads:
First, they must consider the insurer is out no stock.
Secondly, it is but one risk the insurer runs; whereas the assured has
had a risk out, a risk of debts abroad, a risk of a market, and a risk of
his factor, and has a risk of a market to come, and therefore ought to
have an answerable profit.
Thirdly, if it has been a trading voyage, perhaps the adventurer has paid
three or four such premiums, which sometimes make the insurer clear more
by a voyage than the merchant. I myself have paid £100 insurances in
those small premiums on a voyage I have not gotten £50 by; and I suppose
I am not the first that has done so either.
This way of assuring has also, as other arts of trade have, suffered some
improvement (if I may be allowed that term) in our age; and the first
step upon it was an insurance office for houses, to insure them from
fire. Common fame gives the project to Dr. Barebone—a man, I suppose,
better known as a builder than a physician. Whether it were his, or
whose it was, I do not inquire; it was settled on a fund of ground rents,
to answer in case of loss, and met with very good acceptance.
But it was soon followed by another, by way of friendly society, where
all who subscribe pay their quota to build up any man’s house who is a
contributor, if it shall happen to be burnt. I won’t decide which is the
best, or which succeeded best, but I believe the latter brings in most
money to the contriver.
Only one benefit I cannot omit which they reap from these two societies
who are not concerned in either; that if any fire happen, whether in
houses insured or not insured, they have each of them a set of lusty
fellows, generally watermen, who being immediately called up, wherever
they live, by watchmen appointed, are, it must be confessed, very active
and diligent in helping to put out the fire.
As to any further improvement to be made upon assurances in trade, no
question there may; and I doubt not but on payment of a small duty to the
government the king might be made the general insurer of all foreign
trade, of which more under another head.
I am of the opinion also that an office of insurance erected to insure
the titles of lands, in an age where they are so precarious as now, might
be a project not unlikely to succeed, if established on a good fund. But
I shall say no more to that, because it seems to be a design in hand by
some persons in town, and is indeed no thought of my own.
Insuring of life I cannot admire; I shall say nothing to it but that in
Italy, where stabbing and poisoning is so much in vogue, something may be
said for it, and on contingent annuities; and yet I never knew the thing
much approved of on any account.