There is an interesting story how Lloyd's got its start. Shortly after the New World was discovered and commerce was established between England and the North American colonies trade shifted from the Mediterranean to the Atlantic. The cargoes shipped between England and North America were at risk from storms and pirates.

The insurance industry grew out of the precepts of contract law...surety contracts. When someone wanted to make certain that he received either the cargo or its value he would seek out a financier that was willing to pay the surety in the event of loss. The main gathering place at which the financiers gathered to conduct business was Lloyd's Coffee House in London. The financier received a hefty profit in return for acting as the guarantor. Thus the insurance industry was born.