PROTECTION & INDEMNITY CLUBS
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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 is in a nut shell, Third Party Liability insurance for the ship-owner, operator or charterer.
P & I clubs –History
Marine Insurance history go back to Ancient Greek and Roman times. 18th Century Great Britain, formation of Clubs to provide Hull insurance at reasonable cost. Beginning of 19th Century, Hull insurance became more affordable, Hull Clubs went into decline. Until 1870, ship-owners could use the exclusions in their Bills of Lading to avoid liability for cargo related claims. An incident occurred whereby it was deemed it lay outside of the exclusions and the ship-owner was liable and Club rules did not cover the cargo claim
What P&I insurance covers?
•Personal injury, Illness and death claims from the crew, passenger, etc.
•Cargo claims for damage or loss of the same.
•Unrecoverable GA contributions.
•Liability due to a collision.
•Damage to fixed and floating objects (Jetty, Pier, marine animals, Rig, Fishery Facility, etc.)
•Removal of wreck
•Salvage operations
•Civil liabilities imposed due to pollution or oil spill
Role of the P&I clubs
•Manage claims•Act as central point of contact
•Appoint experts, lawyers and correspondents.
What are the functions of P & I Clubs?
- 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.
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