INSURANCE 



3004 



INSURANCE 



other words, something through which these 

 forces will not pass. In the transmission of 

 electric currents insulators are as important 

 as conductors, since electricity can be collected 

 only by their use. A body is said to be insu- 

 lated when it is supported by some non-con- 

 ducting substance, the best insulators being 

 made of glass, rubber, gutta-percha, porcelain, 

 resin, paraffin, sulphur and dry silk. In order 

 that the electric current may pass along tele- 



s 



graph, telephone and electric-light wires 

 stead of escaping into the earth, the wires 

 covered with paraffined cloth, vulcanized rub- 

 ber or silk. The most common insulators on 

 overhead wires are glass or porcelain knobs, 

 made in the form of an inverted cup, and 

 used at the points where the wires are sup- 

 ported on the poles. No insulating substance 

 has thus far been found which will wholly pre- 

 vent electrical leakage. See ELECTRICITY. 



THE STORY OF INSURANCE 



NSURANCE, broadly speaking, is protec- 

 tion against loss. Life gives rise to hazards, 

 some of which can be foreseen more or less 

 clearly; some, like death, are altogether be- 

 yond reckoning. It is the same with every 

 human enterprise. No one can say what ships 

 will come to port, what houses or factories 

 will be destroyed by fire. Chance alone, or 

 circumstances so numerous or uncertain that 

 they can never be taken fully into account, 

 determine the hazards. 



As long as these greatest of all risks have 

 to be assumed by the individual, enterprise is 

 paralyzed. A ship merchant, for example, who 

 is quite ready to shoulder a reasonable risk, 

 will hesitate to engage his fortune in a venture 

 the failure of which will involve total ruin. 

 Such hesitation is only reasonable prudence, 

 and ruinous risks have therefore to be assumed 

 cooperatively by groups. Insurance has thus 

 a considerable social significance; it binds men 

 together by uniting their interests. 



Losses which would be ruinous for any one 

 manufacturer can be rendered relatively slight 

 by being distributed among a large number of 

 manufacturers. The owner of a plant is, there- 

 fore, willing to pay a certain stipulated sum 

 each year into a common fund, in return for 

 the assurance that in case his buildings are 

 destroyed by fire or damaged by an explosion 

 he will be protected against loss. He pays a 

 certain definite sum for the privilege of hav- 

 ing others share with him the risk of loss. The 



total fees so paid must be more than the total 

 losses incurred by the group in any one year. 

 This is insurance. 



The intricate structure of modern business 

 has given rise to many kinds of insurance: 

 insurance against fire (fire insurance) ; insur- 

 ance against shipwreck (marine insurance) ; 

 insurance against breakage or damage to prop- 

 erty through accident, or loss of future earnings 

 through disablement (accident insurance) ; in- 

 demnification of the family in case its bread- 

 winner is removed by death (life insurance). 

 Under these main branches there are many 

 further classifications, as well as insurance 

 against sickness, unemployment and the like. 

 The risk may be assumed by Commercial cor- 

 porations as a business or distributed coopera- 

 tively among the members of a fraternal or 

 labor organization. By far the greater part of 

 insured values -are intrusted, however, to the 

 great joint-stock and mutual companies, many 

 of which carry risks throughout the world. 



Organization. Joint-stock companies and 

 mutual companies write most of the insurance 

 policies; the latter are more numerous but the 

 former carry risks many times as great- The 

 definiteness of the obligation assumed by those 

 who insure in stock companies has doubtless 

 had much to do with their relative popularity. 

 The client of a stock company (called the 

 insured) pays a certain stipulated sum (the 

 premium) annually, in return for which the 

 corporation (the insurer) engages to pay cer- 



