SLAVES AS CARGO: INSURING LIVES OR GOODS?

On 29 November 1781 the master of the Zong, a Liverpool slaver becalmed in the doldrums and running out of provisions, threw 132 living slaves overboard on the assumption that insurance would cover the loss. When the underwriters refused the claim the owners successfully sued. The underwriters applied for a retrial. At the Kings Bench in May 1783 Lord Mansfield and his fellow judges ruled in favor of the applicants, finding that there was no evidence that the loss had been occasioned by “perils of the sea” covered by the standard marine insurance policy.Footnote ⁹ Two years later Mansfield adjudicated another case, where a Bristol ship had lost 55 slaves during a revolt off the coast of Africa. The dispute centred on which losses the underwriters were liable for under the slave insurrection clause in the policy. The court ruled that they were to compensate for slaves shot dead or who died from wounds incurred directly in the struggle, but that they were not liable for deaths by other means, such as drowning, jumping overboard, or “abstinence” from despair at the failure of the uprising.Footnote ¹⁰

In the aftermath of these and other cases, both legislators and the courts wrestled with the problem of how to define more precisely the “perils of the sea” as contained in the standard Lloyd’s policy and restated in the Dolben Act of 1788, the first major British regulation of slave shipping.Footnote ¹¹ Legal ambiguities persisted. In 1794, breaking from standard policy conditions, parliament prohibited the recovery of slave losses due to jettison or as a result of quarrels with rulers on the African coast that derived from aggressive procurement by British crews.Footnote ¹² At the same time, however, the standard underwriters’ exemption from liability for losses through natural death, wastage, or spoilage, was confirmed in Tatham v Hodgson (1796), where the court included within the definition of “natural death” the starvation of slaves by insufficient provisions occasioned by delays in a voyage due to bad weather or poor seamanship.Footnote ¹³ The insurance of slaves was finally made illegal in 1807 by the same act that abolished the British slave trade, although some underwriters continued to insure slavers sailing under foreign flags.Footnote ¹⁴

The Zong trial and other legal cases and atrocity stories became milestones in the campaign for abolition. Abolitionists protested that the slave trade wrongly conflated goods and persons. The Zong’s crew, they argued, should be tried for murder. Shipboard revolts demonstrated the human desire of African slaves for liberty, rendering them something more than insurable cargo. Scholars have taken up these ideas and argued, largely from legal and abolitionist texts, that the status of the insured slave occupied “a middle position in the progress from insurance on goods to insurance on persons, providing a way of thinking about the value of a life” (Armstrong Reference Armstrong2004, p. 170; Swaminathan Reference Swaminathan2010). When slaves used their agency through suicide, revolt or other resistance, “insurance law struggled to know how to respond...” (Webster Reference Webster2007, p. 296). Insurance cases, and the abolitionist commentaries that accompanied them, “dramatized the consequences of legal perversion in the name of profit,” so that “even the most hardened slavers tacitly acknowledged the ...irreducible humanity of a so-called human cargo” (Rupprecht Reference Rupprecht2007b, p. 334, Reference Rupprecht2008).

While the horrors of the middle passage may indeed have advanced the case for abolition, the focus on the latter has given rise to several misconceptions about how the trade regarded slaves and their insurance. Among the extensive private accounts and correspondence of merchants, factors, ships’ captains and surgeons that we have examined, there is not a hint that slaves were regarded by those involved in the business as anything other than a cargo of goods. In the papers of James Rogers covering 1784–1793, the very decade in which the general recognition of the humanity of slaves is supposed to have occurred, the most frequent term in the trade for a slave cargo was “parcel.” The real value of a “parcel” was determined by the ethnicity, size, height, age, gender, state of health, and physical appearance of the slaves comprising the “parcel” at the time of sale, together with the arithmetic of external factors in the market concerned, primarily the supply of and demand for slaves, the state of the sugar crop, and the state of planters’ credit at the time of a ship’s arrival, minus the cost of purchase on the African coast and the cost of provisions on the middle passage.Footnote ¹⁵ There were similarities with the common Dutch and French methods of quantifying slave cargoes as piezas de India (PI), by which an adult male aged 15 to 35, and “without major blemish…good in health, not blind, lame, or broken” was counted as one PI, while women and children were counted as various fractions of one (Postma Reference Postma1990, pp. 37–8, 228–9; Stein Reference Stein1979, p. 85).

Underwriters and their clients uniformly classified slaves as perishable goods. In his 1781 digest of English insurance laws and practices, John Weskett placed slaves alongside cattle as class II common hazards.Footnote ¹⁶ The association of slave and livestock cargoes continued to be made by English courts long after abolition.Footnote ¹⁷ It was also found in maritime codes and trading practices elsewhere in Europe. The principal compilation of Portuguese commercial law and practice “bluntly headed its chapter regarding insurance for cargoes at sea as ‘marine insurance for slaves and beasts’ ” (Miller Reference Miller1988, p. 394). Article 44 of the French Code Noir declared slaves to be “moveable stock” (meubles) and therefore a legitimate object of marine insurance (Émerigon Reference Émerigon1783, p. 208). The Dutch used the word kop (head) for individual slaves, the same term used for cattle (Postma Reference Postma1990, p. 227).Footnote ¹⁸

In most maritime codes, perishable goods, as well as goods of high value or strategic worth, had to be described and have their value specified in the policy as a means of reducing the opportunity for fraud (Weskett Reference Weskett1781, p. 261). This stipulation was important because, as noted earlier, insurers commonly were not held liable for “natural deaths” or “natural wastage,” “corruption” or “spoilage” (including sickness) of perishable goods. On the other hand, they were liable for damage and losses through “perils of the sea,” including goods jettisoned to save a ship in trouble and losses incurred in putting down shipboard revolts that could justifiably be said to endanger ship and crew. Thus it was important for loss adjusters to be able to distinguish between these two types of indemnifiable and non-indemnifiable losses in the event of a claim.

The “natural deaths” exemption clause had a long history. It was found in the policies of fifteenth-century Catalan merchants and in the French maritime ordinance of 1681 (Del Treppo Reference Del Treppo1957, p. 23; Weskett Reference Weskett1781, pp. 260–1).Footnote ¹⁹ French legal commentators agreed that when “animals or negroes” died a “natural death,” or also where slaves committed suicide through despair, the insurer was not to be held liable (Valin Reference Valin1776, vol. 2, p. 55; Émerigon Reference Émerigon1783, pp. 208–9). Similarly, in the Brazilian trade, slavers could not insure their cargoes against common mortality, hence the practice of killing the first slaves to show any signs of a disease feared to be contagious, to save the costs of mortality among the remainder (Miller Reference Miller1988, p. 661).

As we have seen, for those arguing for a post-Zong transition in attitudes towards slave cargoes, the question of insurance losses during shipboard revolts is central. Tim Armstrong, for example, has claimed that slaves were distinguishable from other goods by the “general average sacrifice” clause routinely inserted into slave ship policies (Armstrong Reference Armstrong2004, pp. 170–5; see also Webster Reference Webster2007, p. 291). This exempted insurers from liability from claims arising from shipboard insurrection if the losses amounted to less than 10 percent of the total value of the cargo, hull, and outfit. The argument was that the application of general average to slaves lost in insurrection imbued them in the eyes of underwriters with human agency. General average, however, was merely an accounting device to facilitate the adjustment of losses on certain goods as an average on the value of the ship and all cargo. It was widely applied to other perishable goods, including cattle and horses, in the same measure and with the same level of excess of 10 percent.Footnote ²⁰ “Sacrifice” was understood by those involved in the trade not as a reference to the loss of lives, but to the sharing of the loss of a perishable cargo among the insured. Underwriters used the general average clause with its proportionate excess to hedge against small and pernicious claims on all types of cargo losses. Slaves were no exception. Underwriters and courts dealt with slave losses arising from shipboard revolt as the equivalent of damage and losses caused by livestock panicking during a tempest.Footnote ²¹ Indeed, in the Zong hearing, Mansfield described the jettison of slaves as similar to the jettison or shooting of horses in a storm to save a ship. The problem for the Zong’s owners was that the court found no evidence that the jettison was justified by any perils of the sea. Instead it was the master’s negligence and seamanship that was deemed at fault, and thus there was sufficient doubt that insured losses were not recoverable to warrant a retrial (Oldham Reference Oldham2007, p. 316; Clark Reference Clark, Geoffrey, Gregory and Christian2010, pp. 56–7; Lobban Reference Lobban2007).

Those arguing that transatlantic slave cargoes were positioned somewhere between the insurance of lives and goods have also turned to French evidence suggesting that slaves were insured under ransom insurance policies as fictional “captives,” as a means of circumventing the prohibition on insuring human lives (Armstrong Reference Armstrong2004, p. 170).Footnote ²² According to this fiction, insurance on slaves was to cover the risk of loss of the “ransom money” paid for them upon loading until the money was redeemed through their sale across the Atlantic. A related fiction was that slaves were captured “enemies” and therefore a peril of the sea and a legitimate object of maritime insurance. In his 1783 treatise Balthazard-Marie Émerigon cited ancient sources that argued there was always a state of war between masters and slaves. Thus, when insurers underwrote a ship known to be in the slave trade, they knew it was taking on board “enemies” that would, if they could, cause the loss of the ship.Footnote ²³

This fiction of slaves as the object of ransom insurance appears, however, to be entirely derived from French legal and commercial commentaries (Weskett Reference Weskett1781, p. 72; Valin Reference Valin1776, vol. 2, p. 55). The ransom insurance described in other European maritime ordinances only referred to insurance against the loss of liberty of European crews, rather than their lives, if captured by Turks, Moors, Corsairs, or Barbary Pirates.Footnote ²⁴ The French sources are in any case ambiguous. Émerigon also cites a Marseille admiralty case from 1776 that makes it clear that French courts regarded slaves as goods, without any reference to ransom or redemption (rachat) insurance (Émerigon Reference Émerigon1783, pp. 199–205, 396). Exactly how underwriters and their clients in France and elsewhere in Europe classified slave cargoes in practice, however, would require a close examination of individual merchant’s records and underwriter’s books, the sort of analysis that we have carried out for English slavers, but which for the slave trades of other European nations is beyond the scope of this article.

THE SLAVE TRADE AND BRITISH MARINE INSURANCE

Inikori was the first historian to attempt to measure the importance of the slave trade and the “Atlantic slave economy” to British marine insurance. It formed part of his broader argument about the importance of the trade to the British industrial revolution (Inikori Reference Inikori2002, pp. 338–61).Footnote ²⁵ He defined three channels by which the “Atlantic slave economy” was linked to the insurance industry: premiums earned from insuring British slave voyages in the triangular trade; premiums earned from insuring the trade in slave-produced commodities between England and America, and on the re-export trade in American produce between Britain and Europe; and premiums from insuring in London the American trade of European powers. The last, Inikori declared, was impossible to measure given the limited data. He estimated, however, that in the 1790s the first two channels—slave voyages and the British trade in slave-produced goods—together accounted for 63 percent of premiums earned by the British marine insurance industry (see Table 1 Panel 1.1 Column D). Thus, the slave trade and its related transatlantic commodity trades appear to have been hugely important to the growth of this key financial service.

TABLE 1

ESTIMATING BRITISH MARINE INSURANCE

Notes: Column A: Inikori’s figures derive from the graph in John (Reference John1958, p. 130). Inikori states that the average for 1793–1807 was “roughly twice” that for 1750–1792, and the figure for 1809 was “roughly three times” the average of 1793–1807; Column B: The figure for 1809 is given in Angerstein’s evidence to the Select Committee on Marine Insurance.. As explained in Inikori (Reference Inikori2002, p. 342 n88), the other figures are the product of the ratios between the average premiums of London Assurance for the different periods. Thus, as its premiums in 1793–1807 were one third (not three times as stated in Inikori (Reference Inikori2002, p. 342 n88)) of those in 1809, the annual average premiums for U.K. marine insurance 1793–1807 are “put at approximately £4 m.” London Assurance’s average premiums in 1750–1792 were half those in 1793–1807, so the U.K. average for 1750–1792 is £2 m. Inikori (Reference Inikori2002, p. 342 n88) states that “the figure for 1720–50 is a marginal adjustment arising from the closeness of the company’s premium earnings in 1750–92 and 1720– 50”; Column C: Inikori estimates premiums of £2.52 m from the slave and West Indian trades by applying average premium rates to his estimates of the value of these trades (ships, outfit, goods, slaves). £2.52 m relates to the period 1791–1800, but is applied by Inikori to his estimate of total marine insurance for 1793–1807 to produce the percentage in Column D.

Sources: Column A: Inikori (Reference Inikori2002, p. 342 n87); Column B: Select Committee on Marine Insurance, BPP 1810, IV, 314–15; Inikori (Reference Inikori2002, p. 342 n88); Column C: Inikori (Reference Inikori2002, p. 356).

Notes: Column A: We have raised London Assurance’s net premiums (net of returns) by 25 percent to estimate gross premiums, following the note in Supple’s Table 3.1, and added them to those of Royal Exchange Assurance; Column B: The percentage figure for 1809 is the two corporations’ combined insurance (£6,155,755) as a share of total U.K. marine insurance (£162,538,900), as estimated by the Select Committee on Marine Insurance from company returns and from stamp duty collected on marine insurance policies that year. The figure for 1800/1801–1809/1810 is the corporations’ combined share of stamp duty paid on policies 1800–1809. This probably overstates the corporations’ share (and therefore understates total U.K. marine insurance) because of widespread evasion of duty by private underwriters before 1808. See Marryat (Reference Marryat, David and Takau2000, p. 289). Percentages for 1760–1800 are estimates based on the following assumptions: (i) that the corporations’ share of total duty paid in 1800 (£5,355 out of £113,442, or 4.7 percent) approximates the corporations’ market share in 1790–1799, once adjusted downwards (to 4.5 percent) to allow for some evasion of the stamp duty by private underwriters; (ii) that the two corporations kept pace with Lloyd’s through to 1790; (iii) that their market share was lower during wartime years due to more conservative underwriting, their refusal to insure cross-risks, their higher rates, stricter policy conditions, and the accelerated growth of Lloyds after 1793 (see Kingston Reference Kingston2007). Column C: The figure for 1809 is Angerstein’s estimate given in his evidence to the Select Committee on Marine Insurance. All other U.K. marine insurance premiums are estimated by multiplying up the corporations’ combined premiums by the market shares given in Column B.

Sources: Column A: Supple (1970, p. 61 n2 and table 3.1). Column B: Select Committee on Marine Insurance, BPP 1810, IV, 250. Column C: Select Committee on Marine Insurance, BPP 1810, IV, 314–15. Column D: Inikori (Reference Inikori2002, table 7.3). Column E: Inikori (Reference Inikori2002, p. 356).

The contribution of the slave trade to British economic development has been much debated. While some scholars are sceptical about its macroeconomic impact, arguing that the trade was small and profits precarious, others have pointed to the economic spin-offs and multiplier effects of capital accumulated from trade in slave-grown commodities circulating among British business networks during the late eighteenth and early nineteenth centuries (Eltis and Engerman Reference Eltis and Stanley2000; Zahadieh Reference Zahadieh, Roderick, Jane and Paul2014, p. 403; Pearson Reference Pearson1991; Pearson and Richardson Reference Behrendt, David and David2001; Devine Reference Devine1975). Slave traders were prominent investors, for instance, in the early London dock companies, but they were not necessarily a dominating presence in the City. According to Nicholas Draper, planters’ bills formed an important part of London finance, but, contrary to Inikori, they did not comprise the bulk of bills in circulation in London and the provinces. In the same vein, Draper has also questioned Inikori’s argument that slavery-related trades dominated marine insurance. He estimates, from data of the London Assurance Corporation for 1769–1770, that 15 percent of sums insured on marine insurance policies and one-third of premiums derived from African and West Indian trades at that time, levels well below those estimated by Inikori for the 1790s (Draper Reference Draper2008).

As explained in our notes to Table 1, Inikori’s estimates were based on projecting total British marine insurance premiums backwards from John Julius Angerstein’s figure of £10.95 m in 1809, given in his evidence to the Select Committee on Marine Insurance.Footnote ²⁶ Inikori took the ratio of premiums earned by London Assurance in 1809 to its average premiums for 1793–1807, and applied this ratio to Angerstein’s figure to estimate average annual British marine insurance premiums for 1793–1807. He then employed the same method to estimate annual average total premiums for 1750–1792 and 1720–1750.

There are several problems with this back-projection method. First, Inikori obtained only approximate figures for London Assurance from a graph by A.H. John (Reference John1958, p. 130). Barry Supple calculated more accurate average premiums for London Assurance from the annual data in the company records, and we have used these for our estimates (Supple 1970, p. 61 n2). Second, Inikori ignored the marine business of the other insurance corporation, the Royal Exchange Assurance, which by the 1770s was more than twice as large as that of London Assurance. The accuracy of Inikori’s method partly depends upon the smaller insurer adequately representing the growth of British marine insurance. Our estimates, by contrast, utilize the combined premiums of both corporations, as given by Supple.Footnote ²⁷

Third, Angerstein derived his estimate of £10.95 m premiums in 1809 by applying a rate of 7.5 percent—the “average rate of premiums for the last 22 years…”—to the amount insured by the corporations and by private underwriters in London, as calculated from returns of stamp duty in 1809, plus an estimate for the amount insured in London on the British coasting trade.Footnote ²⁸ This, however, ignored British marine insurance written outside London. The Select Committee itself made an allowance for the latter and estimated the total sum insured to be £162.5 m, compared to

Angerstein’s £140.5 m. Applying the rate of 7.5 percent to £162.5 m gives a total of £12.19 m for marine insurance premiums in 1809. Another member of Lloyd’s, Joseph Marryat, thought that the Select Committee had underestimated the amount written outside London, and he calculated total insured on marine policies to be £175.6 m (Marryat Reference Marryat, David and Takau2000, p. 289).Footnote ²⁹ Applying 7.5 percent to this gives an upper bound of £13.2 m premiums in 1809 (upper bound, because the average rate on Irish and coasting trades would have been lower than 7.5 percent, which was more representative of the premium rate on foreign trade). Furthermore, when the percentage stamp tax on marine insurance was introduced in 1795, Pitt estimated its yield based on a figure of £104 m insured (Raynes Reference Raynes1948, p. 189). At a rate of 7.5 percent, this suggests £7.8 m marine insurance premiums in that year. In short, taking all the previously noted calculations into consideration, Inikori’s annual average of £4 m premiums in 1793–1807, back-projected from Angerstein’s figure of 1809, is almost certainly too low, probably by at least 50 percent. The result, we argue, is to overstate the importance of slaving and slave trade related insurance to British marine insurance in the 1790s and 1800s.

Our new estimates, shown in Table 1, are based on the combined premiums of both corporations 1760–1810 and the annual duty paid on marine insurance 1800–1809. We have used these two components to derive decennial averages of British marine insurance premiums, 1760– 1809, and the share in these of Inikori’s estimated premiums earned on slave and West Indian trades. To do this, we calculate the combined stamp duty paid by the two corporations 1800–1809 as a percentage of the total duty paid, and then multiply the combined premiums of the corporations by that percentage in order to obtain the total premiums earned from British marine insurance in that decade. The same multiplier method—applying the market shares of the corporations to their actual premiums—is used to estimate total marine insurance premiums for the decades between 1760 and 1800. For this period, however, the corporation market shares are estimates based on several assumptions, explained in the notes to Table 1, about the growth of marine insurance before 1800.

Our new estimates suggest that 7 percent of British marine insurance in the 1790s was accounted for by slaving voyages alone, while the slave and West India trades combined accounted for 41 percent, well below Inikori’s figure of 63 percent for 1793–1807. Nevertheless, if not accounting for the great majority of the British marine insurance industry as Inikori claimed, the “Atlantic slave economy” still represented a sizeable portion by the end of the eighteenth century. Moreover, comparing our figure of 41 percent with Draper’s estimate of 33 percent in 1769/1770 suggests that the transatlantic slave trade and its related commodity trades may have increased somewhat in importance to British marine insurance during the final three decades of the eighteenth century, though this was probably not a linear trend as high wartime premiums were offset by reduced volumes of traffic (see Table 2).Footnote ³⁰

TABLE 2

TOTAL SLAVE ARRIVALS IN THE CARIBBEAN (FIVE YEAR TOTALS)

Source: Eltis, Lewis, and Richardson (Reference Eltis, Frank and David2005, table 4, p. 691).

THE UNDERWRITING OF SLAVE VOYAGES

Risk Assessment and Rates

What did underwriters consider when assessing the risk of insuring a slaving voyage? From 1764 the key information for London underwriters was listed in Lloyd’s Register, which itself was probably compiled from the private registers of Lloyd’s members. This fell into three categories: data about the owner, master, and crew; the route (port and destination); and the ship (tonnage, hull, number of decks, guns, construction history, condition) (Wright and Fayle Reference Wright and Ernest Fayle1928, p. 86). It is clear from our dataset that the two principal factors determining Bristol rates were the route and the time of sailing, particularly whether in peace or war. Table 3 presents average premium rates—measured as £ premiums per £100 insured (£ percent)—from three different but consistent sources: the rates given by Inikori, those we have calculated from Abraham Clibborn’s underwriting books, and the accounts of James Rogers. All three sources show that average rates varied between different segments of the triangular voyage. Between the 1770s and 1790s premium rates for the middle passage (Column 2 in Table 3 Panel A, Row 2 in Table 3 Panels B and C) were higher than the other two segments, though not much higher than those charged for the return journey from the Americas (Column 3 in Table 3 Panel A, Row 3 in Table 3 Panels B and C). During wartime, with the increased risk of enemy privateers, the home voyage eastward attracted the highest rates (Column 3 in Table 3 Panel A, Row 3 in Table 3 Panel C).

TABLE 3

INSURANCE RATES FOR BRITISH SLAVING VOYAGES (£ PERCENT)

Notes: (1) All average rates are expressed as £ premiums paid per £100 insured, the standard metric used by contemporary insurers. (2) Inikori states his “rates represent a rather conservative average view of the differing rates in the sources cited” (2002, p. 350). He does not state the number of policies on which his rates were calculated. (3) Rogers was declared bankrupt in 1793 and apparently insured no outward slaving voyages departing from England that year.

Sources: (A): Rates as given in Inikori (Reference Inikori2002, table 7.2, p. 350). (B): Calculated from amounts insured and premiums paid as given in TNA, C107/11, Underwriting books of Abraham Clibborn, 1768/1769–1775. (C): Calculated from amounts insured and premiums paid as given in TNA, C107/1-15, James Rogers Papers.

Perhaps surprisingly, however, these differences in rates did not reflect the “actuarial” risk of losses at sea. Table 4 shows that in the period after 1760 more British slave ships were lost on the first and third segments of the triangular route than in the middle passage, and also that this pattern holds true for the transatlantic slave trade more generally. Why then were rates higher on the middle passage? As previously noted and discussed later, underwriters did not cover the “natural mortality” of slaves on board ships. Only the loss of slaves who died during shipboard insurrections, subject to an excess of 10 percent, or of slaves that were jettisoned to save a ship from storms or shipwreck or other “perils of the sea” could be insured, and both were fairly exceptional events (described later). Thus, slave mortality in the middle passage cannot explain the differential in premium rates. If premium rates for the middle passage had been determined solely by the risk of the wreck or destruction of the ship—our best approximation of the “actuarially fair” rate given the absence of data on other major insurable “perils of the sea”—then the policyholders in our Clibborn-Rogers dataset would have been charged for the middle passage between one quarter to one-third of the premium rates that they actually paid.Footnote ³⁶

TABLE 4

SHIPPING LOSSES IN THE TRANSATLANTIC SLAVE TRADE

Note: Percentage losses are computed by dividing totals in Row 4 by the sum of voyages with known outcomes (i.e., Row 1 less Row 2).

Source: Based on www.slavevoyages.org, accessed 1 May 2017. Search database/basic variables/all voyages and nation/flag/Great Britain, for line 1; basic variables/voyage outcome/outcome of voyage for owner, for line 2; general variables/voyage outcome/particular outcome of voyage/menu options “shipwreck,” for all other lines.

This finding does not mean that underwriters were necessarily irrational when pricing insurance for a slaving voyage. They may have imposed a higher rate for ships on the middle passage because they regarded all cross-risks as inherently riskier than voyages to and from England, although we know of no evidence that this was the case. More probably, they may have factored in a notional premium for the uncertainty of a ship on the high seas being endangered by carrying live, rather than inanimate, cargoes. Livestock such as horses or cattle could stampede in a storm or carry contagious diseases in the same way that slaves might resist control or fatally infect the crew, imperilling the safety of the ship and its navigation.

Although the incidence of such events was probably well known, underwriters would have found it difficult accurately to predict at the outset whether the security and hygiene measures on any given voyage were sufficient to mitigate these risks fully. Similarly, the navigation hazards of the middle passage were well understood—the need to pick up the north east trade winds, the difficulty of passing through the equatorial doldrums without being becalmed for an uncertain and dangerous length of time, mid-ocean storms blowing a ship off course, the risk of tropical storms near the West Indies, the huge variation in crossing times.Footnote ³⁷ Yet it would have been difficult to price these hazards for individual ships with any degree of certainty, notwithstanding good information about the captain’s expertise and the seaworthiness of the vessel.

Another possible explanation for the relatively high premiums for the middle passage may be that ships on this leg were more exposed to capture. In wartime, shipping losses rose and rates on most categories of marine insurance doubled, although there were substantial discounts or rebates if ships joined armed convoys (Wright and Fayle Reference Wright and Ernest Fayle1928, p. 158). Convoy protection, however, was not available for the middle passage, but only for direct routes between Britain and the West Indies and back, as enemy privateers mainly hunted ships sailing outward through the Bristol and English channels or returning from the Americas. Moreover, it was easier for direct traders to get convoys because their schedules were more predictable. By contrast, slave voyages were timed to arrive in Africa in the dry season, which varied by coastal trading location, and, once their cargoes were sold in the Americas, they aimed to clear out for home as soon as possible in order to refit for Africa, without necessarily waiting for a convoy (Eltis, Lewis, and Richardson Reference Eltis, Frank and David2005; Behrendt Reference Behrendt2001).Footnote ³⁸

As Table 5 shows, marine underwriters charged large price differentials in summer and winter for some, though not all, routes in other trades, but these played little role in slave trade insurance. Most slave voyages departed from England to avoid the rainy season in Africa, and left the Caribbean before the onset of the hurricane season in August (Davis Reference Davis1962, pp. 277–82, 292–7; Behrendt Reference Behrendt2001, Reference Behrendt, Bernard and Patricia2009). The repeated advice of West Indian factors to owners was to have slave cargoes arrive at market just prior to or at the start of the sugar harvest, when demand for newly imported slaves was highest and when planters were most likely to agree to shorter terms on their bills, subject, of course, to the state of that year’s crop (Radburn Reference Radburn2015).

TABLE 5

NON-SLAVING MARINE INSURANCE RATES: PREMIUM RATES CHARGED BY LONDON ASSURANCE ON VOYAGES TO AND FROM LONDON, 1768–1770 (£ PERCENT)

Notes: *John (Reference John1958, table 2) notes that £8 of the East Indies premium was to be returned “if no hostilities in European waters.” All rates are shown as £ premiums paid per £100 insured (or £ percent).

Sources: John (Reference John1958, table 2).

Information about the ship, its master and crew, and the quality and value of its cargo, at least on the outward route to Africa, was of less significance in Bristol than route and timing, given that so many local underwriters were part-insurers of their own ships or those of their business partners and neighbors. To that extent, provincial underwriters may have had information advantages over their counterparts at Lloyd’s when assessing risks, though it is still unclear whether this was reflected in differential rates.

Generally, slaves were included in the general rate for the ship and/or cargo. Some, though not all, policies specified “negroes at £30 per head,” increasing to £40 in the war years of the 1790s. This standard price seems to have been set in some relation to the expected average sale price of a “prime adult male” in the West Indies. Cargoes loaded on the African coast, of course, comprised a mixture of slaves by gender, height, age, and ethnicity, factors that, together with the condition of the slaves upon arrival at market, and the state of supply, demand and planters’ credit requirements, would determine the average price achieved by a ship’s cargo. None of this could be known with any certainty at the outset of a voyage. In fact, the per capita insured value of slave cargoes appears, in general, to have been somewhat below the prices achieved in the 1780s by factors in the West Indies.

Both in peace and war, slaving insurance rates tended to be at the higher end of the scale charged by marine underwriters on British foreign trades. Yet as Tables 3 and 5 demonstrate, they were by no means the highest. Slaving voyages, therefore, from the point of view of underwriters, were not extraordinarily risky. The relatively high premiums applied to the large cargoes, however, did amount to a significant cost burden for owners. Richardson and Inikori, separately, have estimated the proportion of outlay costs accounted for by insurance premiums. The figure for 74 voyages out of Liverpool, 1757–1784, was 8.6 percent, and for 60 “African ventures” 1757–1806 it was 9.8 percent. Thus during the second half of the eighteenth century insurance premiums amounted to nearly 10 percent of outward voyage costs. The ratio must have been even higher during wartime (Richardson Reference Richardson, Roger and Hair1989, appendix; Inikori Reference Inikori2002, appendix 7.2). As Richardson has pointed out, this must have had an important effect on slavers’ reported profit margins, though account must be taken of the fact that merchants were often paying some of the premiums to themselves as underwriters (Richardson Reference Richardson, Roger and Hair1989, p. 74). Whether insurance amounted to a higher cost burden than in other trades remains an open question, owing to the lack of evidence on premium payments as a proportion of outlay costs in the latter. As Table 3 Panels B and C indicate, the higher premium rates on the middle passage inflated the cost of insurance for slave traders, at least in peacetime, while rates on the other two legs of the slaving voyage were more aligned with standard bilateral voyage rates in the direct trade. But slaving voyages were also labor intensive, with the cost of hiring crew specifically to attend to and control slaves in transit tending to inflate their overall wage bills (Behrendt Reference Behrendt, David, Suzanne and Anthony2007).Footnote ³⁹ Ship owners took steps to mitigate those bills, by, for example, encouraging the discharge of crew superfluous to the navigational needs of ships once slaves were disembarked in the Americas (Richardson Reference Richardson1987, p. 190).Footnote ⁴⁰ Nonetheless, it may well be the case that the expense associated with such crew reduced the proportionate importance of insurance among the operating costs of slave ships.

What Did Insurance Cover and Not Cover?

As we have seen, slaving voyages were insured on the standard Lloyd’s policy form (or its Bristol and Liverpool counterparts), which listed the usual “perils of the sea.”Footnote ⁴¹ Ships and cargoes were covered from departure in England to arrival on the African coast, usually—not always—with the destination left unspecified, and up to 24 hours after safely beginning trading there. In the majority of policies coverage then resumed from Africa to the Americas, again usually with destination ports left unspecified, to give the captain the opportunity to sail between islands looking for the best market. Excluded was the underwriters’ liability for any lack of seaworthiness of the vessel at time of departureFootnote ⁴²; losses while trading or transporting slaves in boats on the African coast and in rivers—though this was not always specified; worm damage to hulls due to delays in sailing from tropical rivers—some policies, though not all, required hulls to be copper sheathed as a condition of insurance; and the “natural deaths” of slaves. The latter was normally left unspecified in the policy contract. It is clear, however, from their everyday business accounts that underwriters and merchants commonly understood it to mean any slave deaths on board from illness, beatings or torture, suicide or fasting to death, and that they took it to be the equivalent of the standard exemption from liability for the ordinary spoilage, wastage, leakage, or poor handling and storage of other perishable goods such as corn, fish, salt, fruit, flour, and seed. These were commonly warranted “free from particular average,” by which their particular value could not be claimed for unless it was included in any general claim for loss or damage to ship and cargo on which all insurers would pay in proportion to the sums they had individually written. We have found no actuarial calculation by underwriters of the “natural mortality” of slaves on slaving voyages. There was a lot of discussion in the business records between owners, captains, and factors about mortality on individual ships, but this was only ever in relation to what was deemed to be a “paying voyage.”

As previously noted, underwriters were also commonly exempt from liability for any loss or damage to the ship and cargo caused by slave revolt up to 10, or sometimes 5, percent of the net outlay value of the ship and cargo. Any losses above that level would be paid for under general average. On a £6000 policy, assuming this covered the full value of the outlay, at £30 per head a minimum of 20 slaves would have to die directly in a shipboard revolt before underwriters would begin to pay for losses.Footnote ⁴³

This was a hefty “excess” for owners to carry.Footnote ⁴⁴ The 10 percent insurrection exemption clause was intended to reduce the moral hazard of the willful murder of slaves on board, to encourage owners and captains to take proper safety precautions in controlling and preserving the value of these and other perishable cargoes, and to remove the opportunity for small and vexatious claims for losses at sea due to negligence. Taken together, these exclusions, plus the other devices to mitigate moral hazard, such as “privilege” slaves for masters and chief officers and “head” money for surgeons (enhanced by the bonuses paid to them for low shipboard mortality rates under the 1788 Dolben Act), made the underwriting of slave voyages a far less precarious business than it otherwise might have been.Footnote ⁴⁵ This helps to explain the relatively moderate rates charged in comparison, for example with the East Indian trade, or with northern European routes during wartime.