Learning about the history of insurance will help you appreciate its necessity for protecting assets in today's business world. The earliest insurance company in North America was founded three decades before the formation of the United States.
Here's a look at how insurance has evolved to protect businesses and individuals.
One of the most important time markers in the history of insurance was when Benjamin Franklin founded the first insurance firm among the 13 colonies in 1752. The company was called Philadelphia Contributionship, based in Philadelphia, one of the most populated North American cities at the time. During this time, most homes were made of wood, creating fire risks.
Structured as a mutual insurance firm, Franklin's company offered fire coverage. Franklin advertised the business in the newspaper he owned, The Pennsylvania Gazette. The firm avoided insuring homes and buildings that Franklin considered to be fire hazards. It's important to note that insurance goes back to the Roman Empire, although American insurance was patterned after the British model in London.
After becoming an independent nation, the United States saw massive growth during the 19th-century industrial revolution. The proliferation of factories and big machines led to greater workplace risks, which called for safety standards and more detailed liability protection. By the turn of the century, the introduction of the automobile was another reason for people to buy insurance.
The lack of regulation of the insurance business opened the door for fraudulent fly-by-night schemes to exploit victims. In some states, insurance monopolies forced competitors out of business. The combination of diminishing credibility and market manipulation in the insurance industry led states to adopt regulations for the industry. By 1945, Congress passed the McCarran-Ferguson Act, confirming that insurance companies should be regulated at the state level.
Today the insurance industry continues to expand as a response to rapidly changing business technology. Many businesses are now internet-based and require cyber liability coverage to protect against the legal consequences of security breaches. The internet has also impacted the insurance industry in other ways, as customers can now use search engines to find new coverage plans quickly.
Studying the history of insurance gives you a deeper perspective of how the industry has evolved, taking on new risks. Searching for affordable insurance in Texas can be time-consuming, but turning to experienced insurance experts speeds up the journey. Contact us at Bema Insurance today to simplify the process of getting the right coverage for your unique needs.