Edward Lloyd's
Coffee House

When thinking of insurance Edward Lloyd's Coffee House does not automatically spring to mind.

Insurance can be a dreadfully boring subject but definitely, as you will see, one that should be looked at with a view to making this another area where you can save money.

Many people have a false conception about the items they own.

When they buy an expensive electronic item such as a computer, often they do not hesitate to take out an extended warranty – most of which are over-priced – but give no thought to insurance for other valuable equally valuable, but more important pieces of equipment they own.

If you would like to skip this history bit and go direct to keeping yourself and your goods safe, just click here or read on and learn some interesting historical facts.

Lloyds of London is the most famous underwriting establishment in the world, and was started in a coffee shop in the City of London. This was in Edward Lloyd's Coffee House around 1688 in Tower Street, London. While Lloyd was only the proprietor of a coffee house, his establishment was a popular place for sailors, merchants, and shipowners and Lloyd catered for them by providing reliable shipping news and a variety of other services, including saving their money. For this reason Edward Lloyd's Coffee House plays a major role in the insurance business of today.

The shipping industry community frequented Edward Lloyd's Coffee House to discuss deals among themselves. Just after Christmas 1691, the coffee shop relocated to Lombard Street, where a traditional blue plaque commemorates its location. These merchants and ship-owners were very shrewd people and understood the law of averages, risk and capital.

From these small beginnings Edward Lloyd's Coffee House developed into a worldwide underwriting house that covers all types of risks from film star’s legs to jumbo jets.

In the early days a tradition of ringing the Lutine Bell was rung when a ship was lost at sea. Briefly, this bell comes from an ancient French ship La Lutine that surrendered to the British in 1793. Traditionally it was been rung to herald important announcements – one stroke for bad news and two for good.

However, the bell is no longer tolled as the result of a vessel becoming “overdue”. Today, the ringing of the Lutine bell is generally limited to ceremonial occasions, although in rare instances, exceptions are made. For example, the bell was rung following the terrorist attacks in the United States on September 11th, 2001. Strange that there is this long standing link between Edward Lloyd's Coffee House and a modern day tragedy.

Today we insure because we want our assets (house, contents, jewelry, pets, cars, etc.) covered and secure in the case of any accident. The chances are that we will probably not need this cover, but we still need to know we will be secure if something dreadful should happen.

Perhaps the easiest way of explaining how the system works is a reference to how bookmakers operate. You take out cover (or a bet as in the case of bookmakers) because you think your house might be flooded, (or your horse is going to come in first) and the underwriter (or bookmaker) works on the premise that you will not be flooded (or that your horse will not be placed). They are taking the risk and that is why they make a charge for this service. This all began all those years ago in Edward Lloyd's Coffee House

Therefore the law of averages spawned many underwriting companies that exist today.

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