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Here is All You Wanted to Know About P&I Clubs

Written by Capt Rajeev Jassal on May 29, 2017
59
P and I clubs It's Almost July of this year. What's so special in July, you may ask. Naaa.. It's not my birthday and it's not my son's birthday. This is the time I have to shell out a huge chunk of money for my car insurance. Year after Year, each year. Now if I am so much worried about my Car's insurance premium, Imagine about the ship owners. Imagine how much money they need to pay for the insurance of their ships. But that is the cost they cannot avoid. These costs are for the insurance of ship's hull and machinery. The good part in this insurance is that costs are known to the shipowner and they can plan for that. But when a ship is navigating at sea, carrying cargo and is involved in all these activities, it is subjecting itself to a number of claims against the ship owners. For example, a port can claim that ship damaged its fenders or a buoy while berthing. Or the port can claim that ship polluted their waters. So it is not about only insurance of damage to the hull and its machinery but also about all the claims that ship owner can get against him. There can be a number of other kinds of claims. Some logical and some illogical. But ship owners have to make sure that they are insured for all of these. In this post, we will discuss where P&I clubs fit in the marine insurance and how do these work. Let us jump in. ...

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Comments (59)

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  • Nandkishore Gitte June 2, 2017
    Respected SIr, Very use full article . Following are the areas were there is confusion who will pay for these cases P&I or H&M , : Piracy , General Average (some say P&i and other H&M), contact with Jetty,pier,other installation, Delays and Fines by authorities.
    1

    Rajeev Jassal June 3, 2017
    H&M is the insurance for the hull and machinery of the own vessel (except for collision cases where it pays for the 3/4th of the liability towards the other vessel). P&I is insurance for the claims from the third party. If you apply this to all situations, it should be clear. For example contact with jetty, if it involves repairing of the own vessel that would be from H&M but if the port claims for the damage to the pier, that would be covered under P&I. Hope that clarifies.

  • Raman Kumar jha June 10, 2017
    Dear sir, well explained and easy to understand. Thanking you!
    1

    Rajeev Jassal June 23, 2017
    Thanks, Raman...

  • karthigayan June 16, 2017
    Dear sir, if a ship hits a fishing vessel and loss of life of fishermens, then who will contribute for the loss and wat s the limit. thanking you.
    1

    Rajeev Jassal June 23, 2017
    As this will be a third party claim, P&I club will pay on behalf of the shipowner. There is no limit of liability in these cases. The fishermen's family would file the criminal case and shipowner and seafarers involved need to contest that.

  • Avinash Nayak July 3, 2017
    Great information Sir. Request you to kindly answer my query.. Why Marine insurance is called Marine insurance Act?
    1

    Rajeev Jassal July 8, 2017
    That is because, like any other type of insurance, marine insurance too need a law (Act) to govern it. For example, if there is no law, the insurer may simply deny the claims made to him by the assured. Or the assured may not disclose the true picture and still claim the huge money from the insurer.

  • Amit Arora July 8, 2017
    Sir, Can you explain 4/4 Rdc and LLMC 1976 and liability settlement-single liability settlement and cross liability settlement I.e difference between two?
    1

    Rajeev Jassal July 29, 2017
    4/4th RDC is from P&I and it Means that in collision cases, any liability towards other V/L will be covered by P&I. H&M will only cover the damage to own V/L. If an owner chooses 4/4 RDC, the premium of P&I would increase and H&M would decrease. Cross liability is a bigger topic and I will write a post on that...

  • yousri October 18, 2017
    I start my job as a marine cargo surveyor , Would you explain to me how i can got a job (business)or( to work with) from P&I club in my town.( none can advice right here in town.)
    0

  • yousry October 18, 2017
    Thanks in advance.,
    0

  • Kumordzi Ruth November 23, 2017
    Very useful. But would like to know the types of cover the P&I clubs provide to its members and the costs associated. Thank you
    0

  • Amit Tomar January 25, 2018
    Sir, can you please write a blog on cargo insurance and inchmaree clause of H&M insurance
    0

  • Petros Alexopoulos February 8, 2018
    I have been an Insurance Manager for a shipping company of 10 vessels for more than 5 years. I have never seen such matters explained in such a simple and comprehensive way for those needing to know the basics (you even had a small / simple adjustment as a example!). Presenting these matters is such a way, shows solid knowledge on the specific topic and the kindness to share it with the shipping community. Congratulations from a fan from Greece!
    0

  • Global Exchain February 22, 2018
    Found your blog. Its really valuable for worldwide shipping services. I appreciate your article. Its important for ge good informations on worldwide shipping services. So thanks for sharing all that important information.
    0

  • anirban sarkar May 6, 2018
    Wonderful and compact explanation ,thank you sir
    0

  • edward June 2, 2018
    Very useful article. i really love this. Thank you for your sharing this wonderful post. http://www.harikengineering.com/
    0

  • Tina June 20, 2018
    What happens when a vessel owner is involved in an offshore incident such as an engine room fire that eventually caused an oil spill due to delayed responders and US government agency deems the vessel owner as not being compliant with US federal laws which subject the vessel owner to unlimited liability. Will the P&I club pay out the claim or will it be denied?
    0

  • bobby July 2, 2018
    Does a charterer need to secure its own P&I if the ship already has P&I. I am worried about dock suing the charterer if the vessel damages the dock.
    1

    Rajeev Jassal November 21, 2018
    No, charterers will not be responsible for this and hence no claim can be made against the charterers. The claim will be for ship owners or ship manager. The P&I insurance taken by them would be enough for that.

  • Gulbag August 3, 2018
    Dear sir pls advice on below FO hose was connected to DO line. Bunkering commenced. Blunder was realised moment later. Huge claims on part of the ship itself. Who will pay for this claim. TIA
    0

  • Ashish September 5, 2018
    Sir can you please explain relationship of P&I insurance and GA with any example?
    0

  • sanjiv September 6, 2018
    Very well explained. So much clarity and in depth, in very simple language free of jargons
    1

    Rajeev Jassal November 21, 2018
    Thanks Sanjiv...

  • Afdil Firdausy October 9, 2018
    Dear Captain, your explanation is fully noted. However, i am a little bit confused on one thing. The first instance, you said that P&I clubs works on a non-profit basis but at the second you said that the Club will earn the income from the invested fund. The first and second statement sounds inconsistent, could you please clarify? your response will be highly appreciated.
    1

    Rajeev Jassal November 21, 2018
    Even when P&I club earns the income by investing the money, the profit is one way shared by the ship owners itself as it reduces their premium.

  • Deepak singh October 20, 2018
    Dear sir, what is protection and what is indemnity? Can explain in details.
    0

  • Sandeep Pun November 21, 2018
    hello sir, May I know what is the validity of the Certificate of entry ?
    1

    Rajeev Jassal November 21, 2018
    Certificate of entry is generally valid until 20th of Feb. So the Validity is one year if it is issued 20th Feb and less than one year of issued after 20th Feb (such as in case of a new ship or change of P&I club).

  • Vlad November 24, 2018
    Hi sir! Thank you for sharing this information. I have one question, how can I become a p&I club communicator? I don't really find any complete information on Google. I am a full rights lawyer in my country ( Romania) and also a student at the marine University( last year ) in my country and I would love to add both law and marine into my work What would be your advice as an experienced captain? Kind regards
    0

  • Gareth December 3, 2018
    Thank you for such clear info. I see the needs for PI if you are a ship owner. But what of freight forwarders or ship agents or brokers? Can they avail of PI club? Many thanks
    0

  • Neeraj Pandey January 16, 2019
    Brilliant explanations with ease of language. It cleared so many doubts.
    0

  • Adarsh January 24, 2019
    Sir If there is two ships and one is insured and other and both gets collided with other than but only one ship get damaged.Than P/I WILL pay 3/4th directly to one who is damaged why not 100%
    0

  • Aadarsh Anand January 24, 2019
    Sir, Why only 3/4 th is paid by the H & M not 100%..and if 3/4th is paid by the H&M than who will pay remaining 1/4.Shipowner or P/I. and if shipowner dont have that much money to pay.than who will pay and in that case if p/i pay than why will he pay????
    1

    P K DEB August 25, 2022
    H&M generally cover 3/4th of Collussion Liability. However in some cases, the cover can be extended to 4/4th (i.e. Full) with additional premium. If shipowner does not have P&I cover, and unable to pay, ylou need to approach court to get appropriate Court otder to get the ship attached and sold to recover the amount.

  • Arvind Kumar February 9, 2019
    Your this particular article is very useful for me. Thanks for all these valuable information.
    0

  • Mr Htay Aung May 26, 2019
    Dear sir, we introduce myself .I am MS leader marine overseas (Myanmar)Co ltd in Myanmar.Our group holding with SRPS certificate and provided Taiwan vessel The ship owner issue Epandi insurance .The vessel sank of 2,1.2019 Taiwan water.Our group crews missing 14 crews,still not p&I cover yet. Already informed ship insurance broker and third party.Why delaying cover of reason? Please explain us.
    0

  • Mr Htay Aung May 26, 2019
    Dear sir, Up post ,we study Insurance certificate valid June 1918 to jun 1919. Soon expire search certificate. How process early insurance cover for missing crews cover?
    0

  • Swagat Saurav Das June 24, 2019
    Sir really very thanks for all this informations. Sir can you please give some informations about local P & I correspondence.
    0

  • SIVARAMAN BABU August 17, 2019
    Great , very nicely explained thanks
    0

  • Kumar Gautam Singh October 24, 2019
    Sir, in case of collision, the repair cost of ship A, ie.100.000 USD will be also paid by H &M insurance in full after paying 3/4th liability of A towards B?
    0

  • muruganantham November 27, 2019
    Sir, good explanations. I have question about overspill call, how it is contributed between international pooling agreement, limits of claim by individual club and international group of clubs
    0

  • muruganantham November 28, 2019
    Sir, good explanations. I have question about overspill call, how it is contributed between international pooling agreement, limits of claim by individual club and international group of clubs
    0

  • ASHISH KUMAR ROY December 4, 2019
    What is a catastrophic call?.
    0

  • Oguzhan Yilmaz January 23, 2020
    Thanks for this amazingly explained information, easy to understand. I had a lot of questions about these P&I and H&M insurances, now you made everything clear.
    0

  • gloria abakah January 23, 2020
    AM GLORIA , A STUDENT OF REGIONAL MARITIME UNIVERSITY,YOU ARE TOO MUCH, THE UNDERSTANDING OF P&I CLUB IS COOL.MY EMAIL...abakahgloria11@yahoo.com
    0

  • Amar anand April 1, 2020
    As usual very informative....please right on marine lien and arbitration....
    0

  • Nabajyoti Kalita April 8, 2020
    Can you elaborate “So if these defenses apply to a case, the shipper would have nobody to claim these damages from.This is the reason that shipper insures the cargo at each leg of the voyage”?
    0

  • fadis April 9, 2020
    captain the article it was really helpfull.now i know and i understand all about p&i clubs and how it works thank you very much!
    0

  • Amar anand July 8, 2020
    Nice blog Sir
    0

  • vikas pandey July 25, 2020
    Nice explanation Sir , especially your narration style of first few line .
    0

  • Capt Ayaz August 20, 2020
    Can a crew join a ship which is without PnI coverage? Working in Port limit. Private insurance would be given by the company
    0

  • Sumit December 13, 2020
    Common between h & m and p & I club
    0

  • Jummana Saifuddin June 17, 2021
    Thank you very much for writing on this! It is so well explained that I could understand it in one read.
    0

  • MD RAKIB HASAN PRANTA December 18, 2021
    how p&i club collect fund from ship owner?
    0

  • itsolivergeorge April 7, 2022
    An insurance card template can be used to help you keep track of your policy information and to store other important documents related to your insurance. Insurance Card Template- How To Get
    0

  • betfair exchange May 10, 2022
    I’ve read a few excellent stuff here. Certainly worth bookmarking for revisiting. I surprise how a lot effort you place to make this sort of excellent informative website. from satta fast
    0

  • Aseem Singh June 3, 2022
    Does P&I covers claims against injury/loss of life of stevedors, shore labourers when engaged in duties to ship which is member of P&I club?
    0

Capt Rajeev Jassal

About Capt Rajeev Jassal

Capt. Rajeev Jassal has sailed for over 24 years mainly on crude oil, product and chemical tankers. He holds MBA in shipping & Logistics degree from London. He has done extensive research on quantitatively measuring Safety culture onboard and safety climate ashore which he believes is the most important element for safer shipping.

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