Mutual Marine Insurance Clubs

Mutual marine insurance, where shipowners come together to insure each others ships and risks, has been in existence for centuries. Indeed marine insurance is one of the oldest forms of insurance.

London, where Lloyd's and other insurance companies are based, is the major market for shipping insurance, but it was not necessarily the first place that shipowners contacted. Shipowners based some distance away felt that London premiums were too high. Some shipowners simply took the risk themselves and sailed uninsured, but others came together in a local club to insure each other. The success of such a system depended on trust between business partners and knowledge of both ships and men. Whitby had several such clubs and there were others around the coast, at places such as Padstow, Gloucester and Topsham.

Initially these clubs only insured the hull of the ship, usually for very little. However, during the nineteenth century public attitudes about risk began to change as a result of high-profile railway accidents. This led to calls for individuals or their relatives to be able to sue for damages, and so liabilities increased, particularly when the numbers of emigrant ships were rising. So from 1855 the first Protection and Liability (P & I) clubs were formed and these, again, were mutual clubs.

From then till now, the range of liabilities can be wide – from collisions involving fixed objects (such as bridges, jetties or oil rigs) or floating objects (other ships, wreckage), to loss of cargo, liabilities relating to passengers or crew and environmental damage (such as oil spills).

Today the thirteen clubs that are a part of the International Group of P & I Clubs ( insure 90 per cent of the world's shipping. At sea or in port accidents happen and, whether they are caused by nature or by man, insurance will always be needed for the events no-one predicted. Steamship Mutual, one of the top clubs, was established as a mutual insurance club in 1909 to insure some of the last British sailing ships, then working in the coastal trade. Today it insures shipping across the globe including some of the largest container ships, tankers and well known cruise ships, as well as smaller craft including ferries. Helen Doe has written the history of the first hundred years of Steamship Mutual. It is a fascinating study of people, ships, politics and international trade. See Helen’s Books and the Steamship Mutual website.