Insurance may be defined generally as "a contract by which one of the parties binds himself to the other to pay him a sum of money, or otherwise indemnify him, in the case of the happening of a fortuitous event provided for in a general or special manner in the contract, in consideration of the sum of money which the latter party pays or binds himself to pay"; or, in the words of an eminent English judge, "It is a contract to protect men against uncertain events which in any wise may be a disadvantage to them."
The contract securing this indemnity is called a policy, from the Italian polizza d'assicurazione, or di sicurtà, which signifies a memorandum in writing, or bill of security. The sum paid for the indemnity is called a premium, or price; the party taking upon himself the risk being termed the underwriter, because his name is written at the bottom of the policy, while the person protected by the instrument is called the assured. Says one, "The premium paid by the latter and the peril assumed by the former are two correlatives inseparable from each other, and the union constitutes the essence of the contract."
Some writers, Mr. Babbage among others, use the words "assurance" and "insurance" as having distinct meanings; but with all underwriters at this day they are considered synonymous.
Insurance in the first instance was exclusively maritime, and great efforts have been made to prove its antiquity. Some have endeavored, by appeals to Livy, Suetonius, Ulpian, and Cicero, to show that insurance was in use in ancient Rome, and that it was invented at Rhodes a thousand years before the Christian era; while others claim that it existed at Tyre, Carthage, Corinth, Athens, and Alexandria.
There is little doubt, however, that it was first practised by the Lombards, and was introduced into England by a Lombard colony, which in the thirteenth century settled in London, and controlled entirely the foreign trade of the kingdom. After the great fire in London, in 1666, the protection hitherto afforded by insurance to ships only was extended to goods and houses; and insurance as a contract of indemnity was subsequently extended to human life.
It is a singular fact that the subject of effecting insurance on lives was largely and excitingly discussed on the continent of Europe before it had attracted the slightest attention in England; yet at this day it prevails throughout Great Britain, while upon the Continent it is comparatively unknown; its operations there being chiefly confined to France, the Netherlands, Germany, and Denmark.
In Holland, as early as 1681, Van Hadden and De Witt produced elaborate works upon the subject, while no publication appeared in England until twenty years after. These writers were followed by Struyck, in 1740, and by Kirseboon, in 1743; while Parcieux, father and son, St. Cyran, and Duvillard, in France, with Euler, Suchmilch, and Wargentin, in Germany, were with great ability pressing the subject upon the notice of their countrymen. But these efforts led to no practical results, and it was reserved for England at a later day to illustrate the principles of life assurance, and enable the public to enjoy extensively its privileges.
Policies of life assurance were issued in England before any companies were organized to prosecute the business. Like marine policies, they were subscribed by one or more individuals; and the first case we find is that of a ship captain, in 1641, whose life had been insured by two persons who had become his bail. The policy was subscribed by individual underwriters, and an able author observes that the case singularly illustrates the connection which probably once existed between life and maritime insurance, and shows how naturally the latter may have sprung from the former.
No business, with the exception, perhaps, of the express system and of photography, has grown in the United States so rapidly as that of life assurance. There is scarcely a State that has not one or more companies organ-
