The title is pretty self-explanatory, but I thought of this question while studying WW1 and remembering all the Merchant Marine ships getting attacked during WW2. So, if a private shipping company is, say, taking supplies from New York to London in 1915 and gets sunk by a German U-Boat, who pays for that ship? Do insurance rates rise astronomically during war time? Do governments make deals or guarantees with shipping companies, insurance companies? Or would the ship owner simply eat the loss?
Thanks for any insights.
Lloyd's continued to maintain registers of ships for insurance purposes during the second world war. Insurance continued, but rates will have gone up because of increased risk -- which is just how insurance works. Ship owners would therefore have eaten losses to some degree by being forced to pay higher premiums. Part of the benefit of the convoy system (to offset the inconvenience and often reduced speed of merchant travel) has historically been lowered insurance rates. I am unaware of what provisions may have been made for government subsidy of marine insurance during the war to maintain private shipping, so someone else may be able to say more there.