At sea there has grown up etiquette of how the flags should be used and where they should be hoisted and the occasions when they are used.
The term ‘ENSIGN’ is derived from Greek ‘Semeion’, Latin equivalents ‘Signus’ and ‘Insigne’ is the distinguishing National flag worn by ships at or near the stern. According to Late E. M. C. Barraclough, foremost flag historian, the term 'Ensign' was first used by the British Navy way back in 1574.
Many National Flags of today were, in fact, first created as Ensigns for use at sea.
Swallow-tailed or Split National Flag is used as Naval Ensign in Scandinavian Countries.
Most Commonwealth countries use White Ensign to denote Warship
In most countries, but not all, Ensign discharges a dual function; it shows the Nationality and the function of the ship, for example a warship, a merchant ship or a ship in government service, namely, Coast Guard, Coastal/River Police, Customs, Private Yachts and so forth. Most countries, particularly within the Commonwealth Member countries have three or more different ensigns – one for the warships (white), one for the merchant ships (Red) and one used by ships in government duties (Blue). Often these ensigns are further differentiated by superimposing (defacing) the ensigns with the ‘badges’ or ‘emblems’ of the particular organization the ship belongs.