What does P&I insurance cover?

Protection and indemnity (P&I) coverage is a form of marine liability insurance that protects ship owners, operators, and charterers against third-party risks and legal liabilities arising from the commercial operation of a vessel.

Key Risks Covered

• Crew Injury and Illness: Medical expenses, maintenance and cure, lost wages, and repatriation costs for crew members.
• Passenger and Third-Party Liabilities: Injury, illness, or loss of life affecting passengers and other third parties on or off the vessel.
• Cargo Claims: Damage, shortage, or loss of cargo while it is in transit.
• Pollution and Environmental Damage: Cleanup costs, damages, and fines resulting from oil spills or chemical discharges.
• Wreck Removal: Costs associated with the compulsory removal or destruction of a sunken or stranded vessel.
• Property and Object Damage: Harm caused to docks, buoys, fixed structures, or other floating objects not resulting from a direct collision.
• Collisions: Portions of collision liability not fully covered by standard hull and machinery policies.
• Fines and Legal Costs: Penalties imposed by port or customs authorities, alongside expenses for mounting a legal defense.

The International Group of P&I Clubs consists of 12 principal protection and indemnity mutual insurance associations that together insure approximately 90% of the world's ocean-going tonnage.

The Major P&I Clubs

• Gard: Based in Norway; the largest club in the group and the only one with an A+ credit rating.
• NorthStandard: Based in the UK; formed by the 2023 merger of North of England and the Standard Club.
• UK P&I Club: Managed by Thomas Miller; one of the oldest and largest operations in the group.
• Japan P&I Club: The Japan Ship Owners' Mutual Protection & Indemnity Association based in Tokyo.
• Britannia P&I: Managed by Tindall Riley; based in the UK.
• Steamship Mutual: Operates through managers in London and Bermuda.
• Skuld: Assuranceforeningen Skuld, headquartered in Oslo, Norway.
• West of England: The West of England Ship Owners Mutual Insurance Association.
• The London P&I Club: Managed by Aasgardia / Brookes Bell / Thomas Miller specialties historically, a prominent historical mutual.
• The Shipowners' Club: Specializes in smaller and specialist vessels.
• The Swedish Club: Sveriges Ångfartygs Assurans Förening, based in Gothenburg.
• The American Club: American Steamship Owners Mutual Protection and Indemnity Association, domiciled in New York.

Gard AS is the world's largest marine protection and indemnity (P&I) club and a leading global maritime insurer.

Major Global Marine and Maritime Insurers

Maritime insurance spans hull and machinery (H&M), protection and indemnity (liability), and cargo risks. The industry leaders include:

• Gard AS: Based in Norway, Gard is the top mutual marine insurer globally, handling a massive share of the world's ocean-going fleet liability through the International Group of P&I Clubs.
• Allianz Commercial: A premier global marine underwriter providing comprehensive hull, cargo, and liability coverages worldwide.
• Chubb: The world's largest publicly traded property and casualty insurer, offering extensive marine lines, specialized shipping operator solutions, and large-scale maritime reinsurance facilities.
• China P&I Club: One of the largest mutual marine insurers, representing a powerful and rapidly growing share of regional and international shipping protection.
• Tokio Marine Group: A major global property and casualty group with a powerful international marine and transit insurance footprint.
• Zurich Insurance Group: Originally founded as a marine reinsurer, Zurich remains a prominent global provider spanning commercial cargo, hull, and ocean transit risks.
• AIG (American International Group): A dominant commercial marine player offering specialized global vessel, cargo, and liability protection.
• Liberty Mutual Ocean Marine Group: A major provider covering global ports, shipbuilders, hull, machinery, and protection and indemnity risks.

A Protection and Indemnity (P&I) club provides mutual, non-profit marine liability insurance for shipowners, operators, and charterers against third-party risks that traditional insurers do not cover.

Core Purposes

• Risk Pooling: Members pool their money together so everyone shares the financial burden of large maritime claims and liabilities.
• Third-Party Coverage: Covers open-ended liabilities like cargo loss, crew injuries, environmental pollution (such as oil spills), and wreck removal.
• Legal and Support Services: Offers global assistance, legal advice, claims handling, and loss prevention training to members.

How It Works

• Mutuality: The members are both the insurers and the insured, meaning the club operates for their collective benefit rather than for outside shareholders.
• Non-Profit Structure: Financial contributions (called "calls") pay for claims and operational costs, and any surplus money goes back into lowering future costs or building financial reserves.
• Global Cooperation: Most major clubs work through the International Group of P&I Clubs to share massive losses and handle reinsurance programs.

A Protection and Indemnity (P&I) insurance company—more commonly referred to as a P&I Club—is a mutual, non-profit maritime insurance association owned by shipowners, operators, and charterers rather than outside shareholders.

What P&I Insurance Covers

Unlike traditional marine insurers that cover physical damage to a ship (Hull and Machinery) or the cargo itself, a P&I club covers open-ended third-party liabilities and operational risks arising from commercial vessel operations. Typical coverages include:

• Crew and passenger liabilities: Medical expenses, injury, illness, loss of life, and repatriation.
• Environmental incidents: Oil spills, pollution cleanup, and related legal fines or penalties.
• Cargo claims: Loss, shortage, or damage sustained by cargo during transport.
• Collisions and property damage: Damage to docks, buoys, fixed objects, or other vessels.
• Wreck removal: Compulsory removal of sunken or stranded vessel wreckage.

How P&I Clubs Work

Instead of paying a fixed premium to a corporate insurer, members pay contributions known as "calls" into a shared risk pool. If major claims exceed initial estimates, members may face supplementary calls to cover the difference. The vast majority of the world's ocean-going tonnage is coordinated globally through the International Group of P&I Clubs, which helps reinsure these massive multi-billion-dollar liabilities.