The history of engineering insurance
The development of engineering insurance began in England around the middle of the 19th century in the wake of the Industrial Revolution.
The Industrial Revolution had been triggered by the inventions of steam boilers by Papin in 1690 and by Newcomen in 1725, and the double-acting industrial steam engine by James Watt in 1781. The increasing use of steam boilers and steam engines permitted the switch from manual labour in workshops to machine-based production in factories, thus changing the face of technology and society.
The factory worker joined the craftsman and gradually replaced him. The explosion of steam boilers and the rupture of the large flywheels of steam engines were new and unfamiliar types of property damage that also led to personal injuries in the factories and their surroundings.
As a result, the British boiler operators founded the Manchester Steam Users Association in 1854 with the aim of regularly inspecting its members’ steam boilers for deficiencies and instructing the operating personnel on how to use them properly.
Boiler explosions with consequences
This established the institution of technical inspection and, at the same time, the profession of an inspection and later of an insurance engineer. The number of boiler explosions declined considerably, and design methods and materials were improved. Manufacturers’ production operations were supervised by independent experts, as were erection and commissioning.
In 1859, a number of engineers had the idea not only of preventing damage by way of inspections but also of offering insurance protection for property damage and personal injuries, and founded – likewise in Manchester – the Steam Boiler Assurance Company.
Just seven years later, in 1866, the Hartford Steam Boiler Inspection & Insurance Company came into being in the USA, originally with the intention of offering inspections and insurance protection for the locomotives of the private railway companies. This company has since become the largest insurance and inspection company for engineering risks in the USA.
A host of inventions in the 19th century accelerated the process of industrialization and the demand for adequate insurance protection. Electric motors, generators, transformers, water and steam turbines, gas engines, petrol and diesel engines resulted in the flourishing of power engineering and the energy industry.
The supply of electricity in Germany began with the decentralized generation of electricity in industrial companies to drive the machines and in the municipalities for lighting the streets. The year 1900 witnessed the first steam turbine installation with an output of 1 MW at the power station in Elberfeld. From these origins, the electricity supply system based on the pioneering ideas and successful trials of Oskar v. Miller in the second half of the 19th century developed into a central and now trans-European grid with ratings of up to 1,300 to 1,500 MW in nuclear power stations in Germany and France.
As a result of the progress made in compressor and pump construction, together with hygienic sewage disposal in conurbation areas, the gas and water industries led to the establishment of modern gas, water and sewage systems for the rapidly growing cities. The new machinery being used needed adequate insurance protection. In the UK and the USA, the steam boiler insurers provided this under the name of "engine insurance".
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