1. HISTORICAL PERSPECTIVE

One of the oldest precepts in marine insurance, which one may think is perfectly logical, is that the subjects of the insurance will be covered for the value which they have at the commencement of the risk. In the early days, at Edward Lloyd’s coffee house, the underwriter might require some proof that the value which he was being called upon to insure was realistic, and what better proof could the shipowner disclose than the bills for the amounts which he had paid for the ship, its fitting-out, and the moneys which he had disbursed in anticipation of the projected adventure.