The Amsterdam Chamber of Insurance and Average: A New Phase in Formal Contract Enforcement (Late Sixteenth and Seventeenth Centuries)

There is an on-going debate among scholars from various disciplines about economic institutions and their impact on economic development. The case of the Amsterdam Chamber of Insurance is relevant to this discussion and in particular to the part that focuses on the nature and development of contract enforcement mechanisms. Marine insurance was introduced in Amsterdam in the mid-sixteenth century and soon the insurance industry developed into a prospering business. Its development was of great importance to the expansion of long-distance trade as it reduced the financial consequences of risks inherent to maritime trade. However, the new industry with its complex contracts was prone to misunderstandings, fraud and deception, creating the need for an independent, specialised court. The Chamber of Insurance was established as a generalised court, rather than a particularised court as was the case in cities that preceded Amsterdam’s trade dominance. Why did the Amsterdam municipality choose to set up this court and what were the implications? A recently discovered Statute Book of the Chamber gives insight into why the Chamber was established, how it functioned within the setting of Europe’s dominant trade centre and how it has affected the development of similar courts in the Netherlands.