ers of vessels taken by the U. S. Coast Guard
in an arrest and restrain for possession of
illegal drugs are not going to be collecting
much under their marine policies.
One clause that is now common in marine insurance is the “sue and labor” condition, requiring the ship’s master and owners to do all they can to save or salvage the
vessel. As long as the captain stays aboard,
salvors cannot claim the ship or cargo. It
is the reason the captain “goes down with
the ship,” which the captain of Costa Lines
Concordia which floundered and sank off
Italy’s West Coast near an island—in unnavigable waters—might be wishing he had
done the night the giant liner rolled over.
Always New Risks
The British insurance model became the
model for American insurance as well, and
European insurers are often also American
insurers. Every year new risks are found,
and usually some insurer will agree to
cover them. The Governing Committee
of Lloyd’s back many decades ago passed
a rule that no underwriter could write fi-
nancial guarantee insurance. It was exactly
that, called “credit default swaps,” that in
2008 sank AIG and led to a financial melt-down. The coverages were written in London, but not by Lloyd’s.
Underwriters have insured most risks.
We hear of insurance on finding the Loch
Ness Monster, actresses’ legs, a “hole in
one” in golf tournaments and other bizarre
risks, but generally the insurance industry
of the 21st century is ready to take on the
dangers of risk and spread it around, just as
those in Elizabethan times were.
Lloyd’s was instrumental in a number of
risk control efforts. In addition to worldwide information networks, they designed
and mandated the use of lifeboats, had
light houses build along the British coastlines, and designed other safety programs.
The Lloyd’s concept of always paying the
losses they owe has been the standard for
the claims industry for centuries, and remains so today.
Next month, we will cross the Atlantic
and look at adjusting insurance claims in
the United States and Canada.
Ken Brownlee, CPCU, is a former
adjuster and risk manager based
in Atlanta, Ga. He now authors and
edits claims-adjusting textbooks.
DKI.indd 1 14/02/14 5:45PM
The process of issuing
insurance in the 17th century
remains the same in the 21st
at Lloyd’s: Those seeking
insurance go to a broker and
explain their risk. The more
information they are able to
provide, the better rate they
may receive accordingly