Insurance was originally a commercial instrument. It was only after the Great Fire of London of 1666 that the world’s first insurance company, The Insurance Office, was created in London by the economist Dr. Nicholas Barbon to protect houses and buildings. The Insurance Office formed real firefighting teams. It issued badges known as ‘Fire Marks’ for the properties it insured, and its fire brigade would extinguish fires only in buildings with the marks.
A few other companies began offering a similar service, and, to protect their investments, they all formed their own fire brigades too. There was no ‘municipal fire brigade’. These privately-owned fire brigades, having no clear jurisdictions, ‘competed’ with one another to extinguish fires, so that the private fire brigade that arrived first and doused the fire would get paid.
Then things swung to the other extreme. As the number of fire insurance companies grew, so too did the competition among fire brigades. All insurers began to supply customers with ‘fire brands’, to display on their building to indicate which carrier provided the protection. When a fire alarm sounded, all the local fire brigades would respond; if one brigade arrived first but did not find their fire brand on the building, often they would watch it burn, not bothering to fight the fire if they wouldn’t be paid!
Obviously, this concept of each insurance company having its own fire brigade proved to be disastrous. This confusion and chaos soon became unbearable. Eventually, all the insurance companies of London made a deal to donate their equipment to the city to create Britain’s first public fire brigade.