We are experienced in obtaining cover for operators but also for Associations seeking to reinsure part of their exposures.

The vast majority of vessel operators now insure their liabilities by becoming a member of a Protection and Indemnity Association, which covers shipowners specifically for liabilities arising out of the management or navigation of their vessels.

The scope of cover available from P & I Clubs is detailed in their individual rulebooks, but generally, this comprises:

• Injury, illness and death of crew, passengers and stevedores.
• Repatriation of crew and substitute expenses.
• Diversion and other expenses incurred in landing refugees, sick persons and stowaways.
• Collision liability.
• Excess collision liability.
• Pollution by oil or other substances.
• Property damage.
• Towage contract liabilities, and liability under other contracts and indemnities.
• a Cargo loss, shortage and damage.
• Unrecoverable general average contributions.
• Salvor's expenses under the 1980 Lloyd's Standard Form of Salvage Agreement.
• Fines, certain legal and other costs.
• Wreck removal.
• Excess War Risks liability.

In nearly all circumstances, an owner will be offered cover on a mutual basis, the concept of mutuality being fundamental to the operation of P & I Clubs.  In broad terms, this means that in any one year the premium collected from the Members should be identical to total expenses and claims arising out of incidents during the same period.  In this way, the Club makes neither a profit nor loss.  To achieve this result it is possible that members may be required to pay a supplementary premium during the course of a policy year in the event that claims exceed the premium initially collected.

By tradition, the major proportion of all Club entries are renewable at the same time - Noon, on 20th February, and any new entry attaching mid-year has an initial period of insurance up to the next 20th February, thence 12 months although for smaller vessels (e.g. fishing boats, passenger charter vessels), Clubs are now becoming more flexible and allowing P & I renewal dates to mirror those of the hull insurance.  In Club jargon, premium is termed "Calls", thus at commencement of the policy year the Club will make an Advance Call on its members, which is shown as a rate per GRT of the entered vessel.  Often, the advance call is only an instalment premium, and at the same time the Club publishes its estimate of the additional call which they anticipate will be necessary to balance the accounts for that year with the actual amount being determined some six months after the end of the policy year.  Clubs are normally able to maintain supplementaries in line with estimated because of their reinsurance arrangements, the structure of which allows them a degree of flexibility in assessing calls.

To ensure equal treatment of all members and maintain equitable premium levels, the cover granted by Clubs is restricted to those liabilities that are common to all the Members.  Hence cover for cargo claims is on the basis that the carriage of such cargo was on conditions that gave the carrier the benefits and exemptions available under Hague or Hague Visby Rules.  Similarly, the liabilities under towage contract are restricted to customary towage (e.g. compulsory towage whilst entering/leaving port) and liabilities under indemnity contracts would be limited to Port Authority Standard Indemnities or similar agreements.  Should a Member require wider cover than this then the P and I Club are normally able to accommodate the request for a suitable additional premium.