Marine Insurance Is As Old As The Bible
PROTECTED CONTENT
If you’re a current subscriber, log in below. If you would like to subscribe, please click the subscribe tab above.
Username and Password Help
Please enter your email and we will send you a password reset link.
John Nelson graduated from the U.S. Merchant Marine Academy at Kings Point, New York in 1965 and enjoyed a long career at sea on commercial and military support ships. After retiring from his seagoing career, he continued working in various capacities in the maritime industry until a final retirement in 2012. Since then he has been active in researching local history and restoring and operating steam engines and antique mills.
He lives in neighboring Panola County and is a long-time member of the Yalobusha Historical Society. He writes about his experiences in the Panolian, Oxford Eagle and Herald. He is also the uncle of Herald publisher David Howell.
A recent article in a maritime publication relating how the value of cargo lost off the deck of a ship was partially covered by the ancient principle of General Average made me recall a class I took decades ago at the U.S. Merchant Marine Academy.
To refresh my memory on the subject, I found my old textbook on Marine Insurance, and seeing it again brought back more memories. I recalled being a little worried when I learned that we would be taking that course right after lunch since nodding off in class was not tolerated.
I can’t say that the book was any more of a thrilling read today than it was then, but it did remind me that Marine Insurance, in a codified form that we would recognize today, is the oldest form of indemnity known with a traceable history going back at least to the 12th century. And General Average, sometimes referred to as the origin of Marine Insurance, can be traced back another 2100 years.
The principle originated early in the history of maritime trade in the Mediterranean where shipowners to increase their profits would allow merchants and traders to keep bringing goods on board until a ship was dangerously overloaded. If the weather was favorable during the voyage to the next port, everyone was happy.
But if a gale blew up and the ship began taking on water over the gunnels, it was common practice to throw cargo overboard – or jettison cargo as it is known in maritime vernacular – to lighten the ship.
To compensate those who lost their goods to save the ship, the principle of General Average was devised. By this system, the value of the jettisoned goods was prorated over the entire value of the ship and other cargoes so that all participants in the voyage bore a share of the loss.
My old textbook gives an early example of jettison that occurred during a voyage between Joppa and Tarshish. It’s interesting that Jonah was a passenger aboard that ship as he attempted to duck out on an assignment from God to preach in Nineveh.
The book of “Jonah” describes how the ship was tossed about by a mighty tempest on the sea and how the mariners began throwing cargo overboard to lighten the ship. When it was determined by both casting lots and by Jonah’s own admission that God’s displeasure with him might be the reason for the storm, the sailors threw Jonah over the side.
Though today no one seems to know the exact location of Tarshish, its mention in several biblical passages led the author of my textbook to estimate that the voyage took place between 800 and 900 BC. That happens to be just about the time that General Average was recognized in a maritime law code promulgated by the Rhodians who were then masters of Mediterranean shipping.
If those dates are accurate, the losses on the voyage to Tarshish might have been covered by General Average, and if so, the seamen would have had to assign a value to everything jettisoned. I’m not sure if Jonah was included in that tabulation, but I’m guessing they left out any mention of tossing a passenger overboard.
Moving ahead about 900 years to the time when the Apostle Paul was being taken under guard on a voyage to Rome to appeal his case to Caesar, one can see that little had changed in the practice of loading ships. The misfortunes of that voyage were likely caused by overloading and by the fact that it started late in the year when winter storms made sailing on the Mediterranean dangerous.
The book of “Acts” relates how during the course of a storm most everything not nailed down was thrown over the side, and though a good example of jettison, the principle of General Average could not have been applied. For that to be used, a sacrifice of parts of the cargo and ship’s gear would have had to result in the saving of the rest, but on this voyage, the ship and any remaining cargo was ultimately lost off the coast of Malta.
The textbook reminded me that it was not until the1870’s that a member of the British Parliament named Samuel Plimsoll persuaded other members to pass an act that required markings on the hull of British ships to indicate safe load lines. The regulation spread to other nations, and today, Plimsoll Markings are seen amidships on the hulls of commercial ships.
It’s a curious fact that after devising a method to compensate themselves for overloading losses, men were content to wait about another 2,700 years before making a serious effort to eliminate the practice.
