Protection and Indemnity insurance, or as it is more commonly known – ‘P&I’, is the policy ship owners purchase to protect them against liability claims from crew, passengers and third parties. Liability claims include those such as collision, property damage, pollution, environmental damage and removal of wrecks, Personal injury, illness and death claims from the crew, passenger, etc., Deviation due to medical emergency, expenses for persons saved at sea.
In short it provides cover for all the items of liability that are not covered by Hull and machinery insurance.
A Protection and Indemnity or P&I club is a non-governmental, non-profitable mutual or cooperative association of marine insurance providers to its members which consists of ship owners, operators, charterers and seafarers under the member companies.
It covers
- Liability claims due to Collision
- Liability claims due to Property damage
- Liability claims due to Pollution.
- Liability claims due to Environmental Damage
- Liability claims for Removal of wreck
- Liability claims due to Personal injury onboard.
- Illness and death claims from the crew and passenger
- Deviation due to medical emergency.
- Expenses for person saved at sea
- Cargo claims for Damage or loss of the same
- Stowaways and its repatriation arrangement.
- Unrecoverable GA contributions.
- Damage to fixed and floating objects (Jetty, Pier, marine animals, Rig, Fishery Facility, etc.).
- Liability under approved towage contracts.
- Salvage operations.
- Crew claims for Repatriation
- Custom fines
- Freight, Demurrage and defences for dispute under C/P.
- Fines for pollution
- Other Fines
Functions of P&I club are
- Ensure ship owners and operators against third-party liabilities not covered by hull and
machinery policies obtained. The club will usually only accept risks on chartered-in-tonnage
where the member also has owned vessels entered with the organization. Charterers club
exists to offer similar cover for charterers. - Often ensure entire company fleets, but tend to prefer owners with similar types and
standards of fleet. - May subject owner’s vessels to inspection before entry into the club and during
membership. - Strive to keep ‘calls on their members’ at a minimum through loss prevention methods such
as information bulletins aimed at owner’s insurance officers. - Disseminate information aimed at keeping members premiums down.
- Produce lists of correspondents and reliable lawyers and surveyors.
- Produce standard forms of letters of indemnity and protest.
- May post bonds against members, ships when under arrest.
- Issue handbooks containing club rules and lists of correspondents, which are very useful to
Master seeking advice and assistance win in any kind of trouble