Definition
P&I — protection and indemnity — covers the liabilities a ship-owner incurs to others in running the ship: injury and illness of crew and passengers, cargo loss and damage, pollution, wreck removal, damage to docks and the share of collision liability that hull insurance leaves out. It is written by clubs: not-for-profit mutuals owned by their members, the owners and charterers they insure.[1]
Twelve clubs form the International Group of P&I Clubs, which together insure about 87% of the world's ocean-going tonnage. Each club keeps the first US$10 million of a claim; above that, claims are shared among the clubs under the Pooling Agreement and protected by a common reinsurance programme — the reason one club's certificate is accepted almost everywhere.[1]
For the purchasing side, the club matters when things go wrong at a call: an injured crew member needing a doctor, a supplier's launch damaging the ship, a cargo claim requiring a surveyor. The local club correspondent or the agent will arrange it; P&I does not pay for the ship's own stores or repairs.
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Sources
- [1] International Group of P&I Clubs — About — https://www.igpandi.org/about/
A working definition for buyers, not legal advice — the contract, the convention text and your club or class have the last word.