Protection and indemnity (P&I) liability insurance is specifically designed to address the unique needs of the marine industry. It covers practically all maritime liability risks associated with the ownership and operation of a vessel, including third-party risks for damage caused to cargo during transit, risks of environmental damage such as oil spills and pollution, war, and political risks.
There’s no standard underwriting form when it comes to P&I insurance. Rather, underwriters will tailor bespoke P&I coverage for each insured, based on the nature and character of the risk, and the amount of insurance desired.
P&I insurance is often provided by a P&I club, which is essentially a mutual insurance association that provides risk pooling, information, representation and risk mitigation for its members. Typical members of P&I clubs include ship owners, ship operators and charterers – and more recently, membership has been opened up to freight forwarders and warehouse operators. A P&I club reports only to its members, and not to shareholders like a traditional marine insurance company.
What does P&I insurance cover?
The primary purpose of P&I insurance is to provide policyholders with protection against personal injury, illness and death claims from crew, passengers and so forth. P&I insurance also covers things like:
- Liability claims as a result of collision
- Removal of wreck
- Stowaways and repatriation
- Damages to or loss of cargo
- Damages to fixed or floating objects
- Civil liabilities imposed after pollution or oil spill
- Liability under approved towage contracts
What isn’t covered?
It does not cover risks that would fall under a workers’ compensation policy or under the collision clause in a traditional hull policy.
As with any insurance there are limits and exclusions that apply. There may also be a deductible, excess or limits on this type of cover so check with your Wereck insurance broker.
Please talk to us about what may or may not be appropriate for your coverage.
As Insurance is a complex subject, please talk to us now for professional advice and to make sure your level of coverage is appropriate, adequate, and sufficient to your requirements.
The List of Risks or the range of insurances available is not exhaustive, if there are any particular risks that are possibly unique to your type of business and/or for any specific or special requirements, please seek our assistance and guidance.