den from investing in such insurance
ventures. It was the Rhodians who in 313
B.C. came up with the principle of jettison
and general average. They also had a great
lighthouse, the Colossus of Rhodes, a
world wonder in 110 B.C.
Suretyship as Risk Taking
Surety bonding was a much more
common means of spreading risk in
ancient times. As caravans traveled from
village to village local producers would
send their goods to other markets on
the train of camels or donkeys. But what
assurances did they have that the caravan
operator would return with the profit
from the sale? The answer was suretyship;
the caravan would leave something—or
somebody, a slave, daughter or wife, or
a servant—with the producer as a bond
guaranteeing his return with the profit.
The person was “held in bondage.” This
is a common practice even in the 21st
century when one posts a bail bond to get
out of jail, and help the man who fails to
show up for his trial, for the bondsman
will hunt him down and collect.
Solomon, the wise King of Judea who is
credited with the biblical book of Proverbs
notes, “Give a pledge for a stranger and
know no peace; refuse to stand surety and
be safe.” Another warning: “Render up his
garment, he who is surety for the stranger.” It is a sound rule of underwriting to
this day: know the risk, or lose your shirt.
Things were not so different in Old Testament times. Consider this rule regarding accidents from Exodus, “If an ox gores
a man, the ox shall be [killed, but] the
owner of the ox shall be free from liability.
However, if the ox has for some time been
a vicious animal and the owner has been
duly warned and the ox kills a man…
then the ox shall be [destroyed] and the
owner shall be put to death. If, however,
the penalty is commuted for a money
payment, he shall pay in redemption of
his life whatever is imposed upon him.”
Someone had to adjust that claim. Substi-
tute “auto” for “ox,” and you have modern
traffic law, including vehicular homicide.
There was even Biblical workers’ compen-
sation: “When a man strikes his slave …
in the eye [or a tooth] and destroys it, he
shall let the slave go free in compensation
for the eye [or tooth].” Exodus 21 sheds
light on equity law, the same law on which
insurance claims are based.
Over the next few months we’ll take a
deeper look at the history of claims. When
medieval insurance guilds wrote coverage
on cargo, and that cargo was lost or stolen
or damaged, somebody had to represent
the underwriter and settle the claim.
That somebody was a peacemaker—an
adjuster, resolving the claim—just as in
the 21st century.
Ken Brownlee, CPCU, is a former
adjuster and risk manager based in
Atlanta, Ga. He now authors and edits
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