Marine insurance arrived in London in the fifteenth century, with Mediterranean merchants. Accompanying them was a set of customary practices known as the Law Merchant, which set out the rules and their enforcement. Merchants embraced insurance as a mutually beneficial system of risk-sharing, trading it as a club good, rather than a profit- making investment (although profit was not unwelcome). They resolved disputes internally, based on good faith. This system worked well when underwriting and purchasing were confined to an inter- connected merchant community, characterised as insiders. However, when insuring expanded in the later sixteenth century, many outsiders began to participate. Some new buyers did not wish to observe customary market practice, preferring instead to trade for the maximum personal utility or profit, which drove up total costs. Others possessed different understand- ings of customary practice, or worse, intended to defraud established participants. In this analysis, since the real behaviours of actual individuals often defy theoretical separation into binary categories, outsiders are self-defining, comprising anyone who did not play by the insiders’ rules-of-the-game. In the 1570s, London’s merchant-insurers sought assistance from the state in their effort to deal with outsiders. Institutional responses included a three-stranded programme implemen- ted by England’s Privy Council, and culminated in the establishment of organisations for both the execution and enforcement of agreements. The former comprised 1) the establishment of a policy preparation and registration office, 2) the codification of the existing customs of in- surance in ‘Lombard Street’, and 3) the creation of an official body of adjudicators to preside over insurance disputes. The latter culminated legislation of 1601 which formalised, as the Court of Assurances, the tribunal created earlier. These institutions did not operate in a vacuum. They were entangled in contemporaneous issues, especially the battle between common and civil law, and questions of royal prero- gative and monopoly. They were inhibited by a legal system ill-equipped to handle insurance disputes. However, these problems were overcome when merchant-insurers and the state co- operated to meet the challenge of developing market infrastructure which formalised merchant-insurers’ customary rules. The institutions created were sympathetic to merchant needs, and structured to preserve much of the flexibility which heretofore characterised Lon- don marine insurance. In this way, they served to formalise and entrench merchant practice, and thus to support and advance pre-industrial long-distance trade.