P. & I. Insurance

P. & I. Insurance in Maritime Law

Note: There is more information on maritime/admiralty law here.

The following is a definition of P. & I. Insurance, produced by Tetley, in the context of admiralty law: [Translation of P. & I. Insurance in French: “assurance de protection et d’indemnisation”] [Translation of P. & I. Insurance in Spanish: “seguro de protección y de indemnización”] [Translation of P. & I. Insurance in Italian: “assicurazione di protezione e indennizzo”] [Translation of P. & I. Insurance in German: “Reederhaftpflicht”] – Protection and Indemnity Insurance is mutual insurance which covers shipowners’ liability to third parties for damage to their ship or cargo, as well as statutory liabilities such as pollution and wreck removal, but does not cover direct losses to the shipowner’s own ship or cargo. Four classes of coverage are included in P. & I.; (i) Protection, which covers a shipowner for claims paid in regard to liability for loss of life, personal injury, damage to fixed or floating objects, wreck removal and one-fault collision (see this maritime law term in this legal dictionary) in liability; (ii) Indemnity, which reimburses the shipowner for indemnity given to owners of damaged or lost cargo; (iii) War risks; (iv) Freight War Risks.

The bulk of this coverage is provided by: P. & I. Clubs (Protection and Indemnity Clubs) [Translation of P. & I. Insurance in French: “mutuelles de protection et d’indemnisation”] [Translation of P. & I. Insurance in Spanish: “clubs de protección e indemnización”] [Translation of P. & I. Insurance in German: “Reedervereinigung für die Versicherung von Schiffsrisiken”]. These have been formed by shipowners to provide financial protection against the extent of liabilities to which they may be subjected. As a result of the “homogeneity” of risks faced by shipowners, P. & I. Clubs operate on a mutual basis where risks are placed in the same portfolio; annual premiums are paid into a common fund according to the degree of exposure to risks,(1) and losses are indemnified out of this common fund. See Tetley, Int’l. M. & A. L., 2003 at pp. 591-592.

1 “… each member is rated for annual contributions in accordance with the hazards he wishes to cover, the deductibles chosen, and the individual risk exposure he represents …. This basic rate, which also includes the member’s share of expenditures for the running of the association and for reinsurance premiums, is multiplied by the tonnage entered for the ‘policy year’ and produces the ‘advance call’. After a ‘policy year’ ends, … a balance is struck between the income derived from the ‘advance call’ and the expenditure for claims (paid and outstanding) and management, reinsurance and representatives fees. Excess expenditure over income is collected from members by ‘supplementary calls’ (one or more) in proportion to their ‘advance calls’. If income exceeds expenditure … a return is made on the same basis.”

In other words, the members of the Club share each other’s liabilities; the insurer also being the assured. At present, there are less than twenty P. & I. Clubs in operation. The major Clubs have joined the International Group of Protection and Indemnity Clubs (see this maritime law term in this legal dictionary), forming a pool for reinsurance purposes, as well as giving attention to problems of general concern to members. The major Clubs are in the United Kingdom, Scandinavia, Japan and the United States of America. The International Group Clubs are:

The American Steamship Owners Mutual Protection and Indemnity Association, Inc. – Website: https://www.american-club.com/. Email: info [at] american-club [dot] net.

Assuranceforeningen Skuld (Gjensidig) –

Website: https://www.skuld.com/. Email: osl [at] skuld [dot] com.

Britannia Steam Ship Insurance Association Ltd. –

Website: https://www.britanniapandi.com/. Email: https://www.britanniapandi.com/contact.html.

Gard AS –

Website: https://www.gard.no/. Email: companymail [at] gard [dot] no.

Japan Ship Owners’ Mutual Protection & Indemnity Association –

Website: https://www.piclub.or.jp/. Email: general-dpt [at] piclub [dot] or [dot] jp.

London Steam-Ship Owners’ Mutual Insurance Association Limited –

Website: https://www.lsso.com/. Email: comms [at] a-bilbrough [dot] co [dot] uk.

North of England P. & I. Association –

Website: https://www.nepia.com/. Email: general [at] nepia [dot] com.

Shipowners’ Mutual Protection and Indemnity Association (Luxembourg) –

Website: https://www.shipownersclub.com/. Email: info [at] shipowners [dot] co [dot] uk.

Standard Steamship Owners’ Protection & Indemnity Association Limited – Website: https://www.standard-club.com/. Email: p&i.london.ctcplc.com.

Steamship Mutual Underwriting Association Limited –

Website: https://www.ssmua.com/. Email: steamship [at] simsl [dot] com.

Sveriges Angfartygs Assurans Forening (The Swedish Club) –

Website: https://www.swedishclub.com. Email: swedish [dot] club [at] swedishclub [dot] com/”>swedish [dot] club [at] swedishclub [dot] com/.

United Kingdom Mutual Steam-Ship Assurance Association Limited –

Website: https://www.ukpandi.com/. Email: john [dot] mcphail [at] thomasmiller [dot] com.

West of England Ship Owners Mutual Insurance Services Limited –

Website: https://www.westpandi.com/. Email: mail [at] westpandi [dot] com.