P&I Insurance Explained
If you’re in the maritime business, you’ve probably heard of P&I Insurance. But what you’ve heard may only scratch the surface, this article will aid in understanding the most misunderstood layer of maritime risk protection.
P&I stands for Protection and Indemnity and while it’s often seen as “extra” coverage, the reality is this: P&I is where marine insurance gets serious.
What exactly does P&I cover?
While traditional marine insurance handles things like hull damage or lost cargo, P&I steps in when third-party liabilities arise. This covers: Crew injury or death, Environmental pollution, Damage to docks, ports, or other ships, Wreck removal, Legal costs following an incident.
Without P&I, even a minor incident could expose you to massive legal and financial risks.
P&I Clubs: Not Your Typical Insurer
P&I isn’t sold by a retail broker the way other insurance is. It’s provided by mutual associations called P&I Clubs. These are organizations where shipowners pool their risks together. Each club has its own rules, entry conditions and underwriting approach.
Why is this important now?
Because shipping is changing in the sense that regulations are tighter, environmental penalties are steeper, labor protections are stronger and courts are less forgiving. P&I isn’t just a checkbox anymore, it’s the foundation of operational protection in global waters.
Conclusively
If you own or manage vessels and haven’t reviewed your P&I structure lately, now is the time. It’s not just about meeting minimum requirements, it’s about protecting your future.
