INSURANCE, a contract by which one party, for a stipulated consideration, under takes to indemnify or compensate another party against loss by certain specified risks. The party undertaking to snake the indemnity is usually called the insurer or underwriter, the other the insured or assured; the agreed con sideration is termed the premium; the written contract, a policy; the events or causes of loss insured against, risks of perils; and the thing insured or the subject to be protected, the in surable interest. Marine insurance relates to property and risks at sea; insurance of property on shore against fire is called fire insurance; life insurance, in its widest sense, is a contract entered into by the insurer to pay a certain benefit contingent upon the duration of one or more lives. Besides these classes of insurance there are many others; the traveler may insure himself against loss entailed from damage by rail or sea; the farmer from the inroads of disease among his live stock; the employer from the fraud of a dishonest cashier, etc.
The practice of marine insurance seems to have long preceded insurances against fire and upon lives. It is impossible to state the precise
period of its introduction, but it is probable that it dates from about the beginning of the 15th century; though it is contended, on the author ity of certain ancient writers, that traces of this form of insurance are to be found among the Romans. Some Anglo-Saxon guilds insured their members against loss from fire, water, robbery, etc. Commercial insurance, however, seems to have originated in Flanders about 130CI, although priority is claimed for both Italy and Spain. It is probable that insurance was intro duced into England by the Lombards early in the 16th century, but few court cases pertaining to it are found till the middle of the 18th cen tury.
In Great Britain fire insurance has been practised for over two centuries, but on the Continent its introduction dates considerably later. The history of life insurance, as well as that of various other forms now in practice belongs to a still later time. For the history and development of the principal insurance sys tems in America, see ACCIDENT INSURANCE; AUTO