Protection & Indemnity (P&I)
Protection & Indemnity (P&I) insurance covers a shipowner's or operator's third-party liabilities arising from operating a ship — the risks that hull and cargo insurance do not. It is provided on a mutual (non-profit) basis by P&I clubs, associations of shipowners who pool their risks; members pay “calls” (contributions) and the club pays members' covered liabilities.
P&I covers a broad range of liabilities: injury, illness or death of crew and others, cargo loss and damage claims, collision and property damage, pollution, wreck removal, fines, and stowaways. The leading clubs form the International Group, which shares very large claims through reinsurance, enabling cover for catastrophic risks like major oil spills. P&I is essential and effectively compulsory — ports and regulators require evidence of it (a “blue card”) for liabilities such as pollution. Together with hull & machinery insurance (covering the ship itself) and cargo insurance, P&I is one of the pillars of marine insurance and a fundamental part of running ships.
Operating a ship exposes the owner to enormous third-party liabilities — a crew injury, a cargo claim, an oil spill — that hull and cargo cover don't touch. P&I clubs pool those risks mutually and are effectively compulsory, since no ship trades without proof of pollution cover. It is one of the indispensable pillars of marine insurance.
What does P&I cover that hull insurance doesn't?
Third-party liabilities — crew and personal injury, cargo claims, pollution, collision liability, wreck removal and fines — rather than damage to the ship itself.
What is a P&I club?
A mutual, non-profit association of shipowners who pool their liability risks; members pay calls and the club covers members' claims.