Who were the first insurance contracts designed to protect?

It’s interesting to note that insurance has existed in some form for a very long time. The earliest insurance policies were what were called bottomry contracts. They provided shipping protection for merchants as far back as 3000 B.C. In general, the contracts were often no more than verbal agreements. They granted loans to merchants with the understanding that if a particular shipment of goods was lost at sea, the loan didn’t have to be repaid. Interest on the loans varied according to how risky it was to transport the goods. During periods of heavy piracy at sea, for example, the amount of interest and the cost of the policy went up considerably. So, you can see how insurance helped encourage international trade. Even the most cautious merchants became willing to risk shipping their goods over long distances—not to mention in hazardous weather conditions—when they had this kind of protection available. Generally speaking, the basic form of an insurance policy has been pretty much the same since the Middle Ages. There are four points that were salient then and remain paramount in all policies today.