Philadelphia Contributionship

The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire stood as the first fire insurance company in what would become the United States when it opened for business in 1752. The insurance company formed largely due to the efforts of Benjamin Franklin, opening more than thirty years before another similar business opened in the young nation. Today, it functions as North America’s longest-continuously operating fire insurance company, still operating in the historic building that opened in 1836.

Given that cities routinely included numerous wooden buildings, sidewalks, and various materials, anything from lightning strikes to accidents with lanterns could set off major blazes, notably on dry and windy days. During the eighteenth century, catastrophic fires occurred in Boston (1760), New York City (1776), New Orleans Fire (1788), and Savannah (1796). By the nineteenth century, rapid urbanization led to more frequent fires, which inspired cities to develop modernized firefighting strategies. Still, significant blazes continued well into the late nineteenth and early twentieth centuries, most famously the Great Chicago Fire of 1871 and the earthquake-fueled fire of San Francisco in 1906. Equally important to firefighting, fire insurance companies materialized to aid in economic recovery.

The first attempt to create a fire-insurance company in South Carolina occurred in 1735, but it quickly failed after a catastrophic fire swept through Charleston in 1740 and overwhelmed South Carolina’s Friendly Society for the Mutual Insuring of Houses. Ten years later, around 1750, Philadelphia's all-volunteer Union Fire Company, founded by Benjamin Franklin in 1736 after a major fire, attempted to create a fire insurance company, but its limited membership numbers prevented the company from accumulating sufficient finances to fund the project. So, the new company discussed the idea with Philadelphia's six other volunteer fire companies and received an eager willingness to join in the insurance venture. Representatives met periodically in 1752 and formed, the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. Seventy-five Philadelphia citizens subscribed to The Contributionship's Deed of Settlement (rules of operation) based on a comparable plan set forth by London's Amicable Contributors, and they publicly solicited its first subscribers on February 18, 1752. A few weeks later, on April 13, Ben Franklin then placed an advertisement in his paper, the Pennsylvania Gazette, about a meeting at the Court House to elect The Contributionship’s board of directors and first treasurer. Although it took time, The Contributionship formally incorporated in 1769 in accordance with Pennsylvania law.

The Deed of Settlement included provisions to limit acceptable risks to houses built according to legal specifications and they refused to insure any house not approved by one of the company's two inspectors, or "surveyors." For instance, owning a wood-framed house versus a brick house, or operating a dry-goods store versus one with chemicals might require different fees to the insurance company. In fact, in 1769, the company decided it would cease insuring wooden buildings or brick buildings with wooden gables. And, in 1781, the company stopped insuring homes with trees around them. Since fire engines of the time lacked hoses, some believed that trees block the stream of water pumped from the fire engines, making it impossible to extinguish the fire. In short, they began a process of risk analysis, which included rejecting some applicants, which remains true in insurance operations today. 

For several decades, the Philadelphia Contributionship had no permanent headquarters, so it conducted its business in homes and various public locations, including taverns. The reelection of Horace Binney to the board of directors in 1831 — he had served previously in 1817-20, led to the company's modernization, from giving more responsibility to the treasurer and updating the company's bookkeeping practices to finding a permanent office. The company commissioned Thomas U. Walter, architect of the United States Capitol, to design a permanent home for the company. In 1836, the Contributionship moved into a newly constructed three-and-one-half-story red brick house, where the company continues to operate its business. 

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