The Philadelphia Contributionship: A New Startup 270 Years Ago

May 14, 2022

Two hundred and seventy years ago on Friday, February 4, 1752, Franklin’s Pennsylvania Gazette posted the following notice, alerting Philadelphians to a new opportunity:

The subscribers to the articles of insurance of houses from fire, in and near the city of Philadelphia, are desired to meet on Saturday next, at three a clock in the afternoon, at the Court-house in order to agree on proper measures for carrying the same into immediate execution.

Pennsylvania Gazette, 1752

On left is the Court House where those interested in the new company came together and where the company’s general meetings were held from 1752-1820. The Christ Church steeple appears in the background. Engraved by William Birch & Son, 1799.

It was not, of course, quite that easy. On February 18th Franklin again posted a notice in The Pennsylvania Gazette:

All persons inclined to subscribe to the articles of insurance of houses from fire, in or near this city, are desired to appear at the Court-house where attendance will be given, to take in their subscriptions, every seventh day of the week, in the afternoon, until the 13th of April next, being the day appointed by the said articles for electing twelve directors and a treasurer.

Pennsylvania Gazette, 1752

Persistence paid off with a sufficient number of subscribers to assure success. On April 13, 1752 “sundry subscribers met at the Court House on that day and elected the following officers… John Smith, Treasurer” and for Officers: Benjamin Franklin, William Coleman, Philip Syng, Samuel Rhoads, Hugh Roberts, Israel Pemberton, Jr., John Mifflin, Joseph Morris, Joseph Fox, Jonathan Zane, William Griffitts, and Amos Strettell. This marked the beginnings of The Philadelphia Contributionship.

It took a little longer for details to be worked out. The board came together for the first time on May 11, 1752, asking silversmith Philip Syng to provide a seal with “four hands united and the motto Philadelphia Contributionship.” William Coleman offered to come up with a system for keeping the books. They all agreed on fines for absence and lateness: 2 shillings for complete absence from meetings and one shilling for not meeting “at precisely the hour appointed.”

Six days later they reconvened and agreed upon a job description for a clerk, 40 pounds per year to receive applications for insurance, direct the surveyors to make a report on the property and in turn present that report to the board, attend the Directors at their meetings (approximately 26 in that first year including the annual meeting), notify prospective insureds of the board’s decision regarding the application, notify the treasurer of the amount owed (minus the “earnest money” for the policy and fire mark), make out the policy, get it signed by three directors and deliver it and the fire mark. A lot of detail work for forty pounds a year, but Joseph Saunders undertook it, placing a notice in the Pennsylvania Gazette on June 11, 1752.

NOTICE is hereby given, That the Insurance Office, for shipping and houses, is kept by JOSEPH SAUNDERS, at his house, where Israel Pemberton, senior, lately lived, near the Queen Head, in Water street.

Saunders spent two years helping the Company get up and running before devoting himself to his own mercantile interests. By 1754 The Philadelphia Contributionship had issued approximately 250 policies and survived its first loss caused when fire damaged the house of Peter Bard in 1753. His home was repaired under the direction of three directors and Franklin, perhaps the Company’s early public relations director, noted in the Gazette, “the House being insur’d, the Damage will be immediately repaired, without Cost to the Owner.” The Company was well on its way to being an established business within Philadelphia although it would face lean years ahead.

The Philadelphia Contributionship was not the first insurance company in the colonies, that honor goes to the Friendly Society for the mutual Insurance of houses in Charles-Town from Loss by Fire in Charleston, South Carolina established in 1735. However, a large fire swept through Charleston in 1740, destroying nearly much of the city and bankrupting the Friendly Society. More extensive use of brick and stone building materials and fire prevention planning on the part of William Penn and his surveyor in the seventeenth century, gave The Philadelphia Contributionship a decided advantage.

The Company’s early financial struggles were offset by few losses. Additionally, the Directors’ experiences over time allowed The Company to grow as well. They established a capital fund to pay the expenses of the office and losses in 1763. A few years later they incorporated which allowed for more streamlined operations and limited individual directors’ liability. Finally they adopted more stringent underwriting guidelines. By 1776 many of Philadelphia’s institutions and prominent citizens insured their buildings with The Philadelphia Contributionship. No longer considered a start up, The Philadelphia Contributionship was now a familiar part of the city’s life. Its clasped hands fire marks dotted buildings throughout the city limits and beyond. Following the impending Revolutionary War, its method of operation would prove to be a model for future companies.