Introduction To The Law Of Marine Insurance

Abstract The need to protect investment in maritime adventure was recognized in early civilizations. Contractual transfer of risk was pioneered through loans on the security of a vessel or cargo, repayable at a high rate of interest should the secured property arrive safely but otherwise not repayable. Such maritime loans existed in ancient Babylon, were used by the Phoenicians, ancient Greeks, and Romans, and were revived in medieval Italy. They became known as ‘bottomry’ where the secured property was a vessel and ‘respondentia’ where the secured property was cargo. In addition, from at least the time of commercial prominence of ancient Rhodes, risk has been shared through the system of general average, by which a loss incurred for the benefit of a common maritime adventure is shared among all interests benefited by the loss. In general average, however, the interest that sustains the loss must still carry its share and recovery is contingent upon other interests deriving benefit from the loss.