The process of owning and operating ships and marine vessels is a very extensive industry and amounts to carrying almost 90% of the world’s trade. As per the P&I club India the shipping industry has to also face a number of liabilities during their operations. Here is where protection and indemnity insurance comes into the picture.

Protection and Indemnity Insurance (P&I) protects shipowners from the maritime liability risks that are associated with owning and operating a vessel. Along the course of business, ships encounter damage to vessels, damage to cargo that is being transported and also lawsuits from the crew on the ship. The occurrence of such events can result in lawsuits and this is where the need for Protection and Indemnity Insurance arises. Although there is no standard insurance form for P&I cover in India, underwriters customise P&I coverage for the insured parties, as per the nature and character of risks involved, and the amount of insurance sought.

What does P&I insurance cover?  

• Illness, Injury, and Loss of Life: This applies to crew members and passengers who do not get covered under any injury compensation act in the course of sailing or work.
• Medical Expenses: If any medical expenses are incurred during the course of business, they will be covered under protection and indemnity insurance.
• Damage to Other Vessels or Property: While navigating the seas, there are possibilities of collision with other shipping vessels. There can also be collision with piers, docks, and harbor equipment. Protection and indemnity insurance covers damages occurring from such instances.
• Damage to Cargo: When cargo in transit gets damaged, the damages are covered by protection and indemnity insurance.
• Wreck Removal: Owners of vessels are often obliged to incur clean-up costs for wreckages, at times even when the shipowner is not at fault. Such costs are covered by protection and indemnity insurance.
• Quarantine: During the break out of pandemics, like the recent Covid-19 there can be situations that necessitate the need for quarantining the crew of the ship. The ship may also be asked to be taken to the nearest port for disinfecting it. Costs for such situations are covered by protection and indemnity insurance. If any crew has to be repatriated during this time, such costs will also be covered.

Which are the entities that provide Protection and Indemnity Insurance?

Non-governmental, non-profit mutual or cooperative associations called P&I clubs provide Protection and Indemnity Insurance policies. These clubs are formed by shipowners, operators, charters, and seafarers. Each of the clubs has a local P&I correspondent. Those seeking assistance in Goa can get in touch with the leading P&I correspondents in India some of whom are correspondents for multiple clubs. These correspondents professionally manage claims and surveys for their clients. 

Also Read: How to Lower Your Freight Cost

It is purely due to survival needs amidst the complex shipping industry, we see the significance of Protection and Indemnity Insurance policies. Such policies help mitigate the losses to ship owners and even the crew.