What are the risks covered under the P&I Clubs Insurance? Give details of these and what is included in each category.
Model Answer - Question 8- May 2022 - Ship Operations and Management
P&I (protection and indemnity) clubs provide insurance coverage for a wide range of risks that shipping companies and vessel owners face. Some of the main types of risks covered under P&I insurance include:
Third-party liabilities: This type of coverage protects the insured from claims made against them by third parties, such as passengers, other ships, or cargo owners. This can include claims arising from collisions, personal injury or death, pollution, or damage to property.
Crew liabilities: P&I insurance also covers claims made against the insured by the ship's crew, such as for personal injury or death, or for breach of contract.
Environmental liabilities: P&I insurance can also cover the insured against claims arising from environmental pollution, including oil spills and other types of pollution caused by the ship's operations.
War risks: P&I insurance can provide coverage for risks associated with war or other hostilities, such as war-risk damage to the ship, piracy, or hijacking.
Loss of hire: Protection against loss of chartering income when the vessel is unable to trade due to an insured event.
Freight, Demurrage and Defence (FD&D): protection against the cost of freight, demurrage and legal defense in relation to disputes over cargo damage or loss
Legal costs and expenses: Some P&I clubs also provide coverage for legal costs and expenses associated with defending claims, including coverage for legal representation in court.
It's important to note that the coverage provided by P&I clubs can vary depending on the specific club and the policies they offer, and the limits of cover of each type of liability can vary as well. It's always recommended that you consult the policy documentation and speak with the underwriter or agent to understand exactly what is and isn't covered under your policy.
