An Introduction to P&I Insurance and Loss Prevention, Third Edition

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Overview

The updated third edition of this guide provides a comprehensive introduction to the fascinating world of marine liability insurance. It focuses in particular on the services provided by the members of the International Group of P&I Clubs, which mutually insure over 90% of the world’s ocean-going tonnage. The guide also introduces key international conventions and regulations governing international shipping practice as well as the all-important topic of maritime loss prevention.

Formed in 1860 and regarded as one of the most successful P&I clubs, The North of England P&I Association has written this guide as a standalone publication for anyone wishing to get a basic grounding in P&I insurance and loss prevention. It also serves as the main reference book for North’s longestablished educational courses on the topic.

Content

INTRODUCTION TO P&I CLUBS

Ship operators’ insurance requirements

History of marine insurance

Mutual P&I clubs today

International Group of P&I Clubs

Insurance not provided by International Group P&I Clubs

Advantages of mutual P&I clubs

P&I correspondents

Summary

 

P&I UNDERWRITING

Premium income

Types of premium

Policy year

Loss ratio

Abatement

Reinsurance

Reserves

Entering ships in a P&I club

Summary

 

P&I AND LOSS PREVENTION

Need for loss prevention

Reactive approach to loss prevention

Proactive approach to loss prevention

P&I clubs and loss prevention

Summary

 

P&I PRINCIPLES AND RULES

Underlying principles of P&I

General rules governing P&I insurance

Major categories of risk covered by P&I Summary

 

P&I INSURANCE FOR PEOPLE

International health and safety legislation

Domestic health and safety legislation

Personal injury and illness

P&I cover for ship’s crew

P&I cover for supernumeraries

P&I cover for passengers

P&I cover for third parties

Loss prevention for crew, passengers and third parties

Stowaways

Persons in distress

P&I cover for stowaways and persons in distress

Loss prevention for stowaways and persons in distress

Diversion and deviation

P&I cover for diversion and deviation

Loss prevention for diversion and deviation

Summary

 

P&I INSURANCE FOR CARGO

International trade

International conventions relating to the carriage of goods at sea

Charterparties and chartering

Charterparty forms

Relationship between the charterparty and bill of lading

Time charterparties

Voyage charterparties

Charterparty problems

P&I cover for cargo

Loss prevention for cargo

Summary

 

P&I INSURANCE FOR SHIPS

Collisions

Insurance cover for collisions

Loss prevention for collisions

General average and salvage

Insurance cover for general average and salvage

Damage to third-party property

P&I cover for damage to third-party property

Loss prevention for damage to third-party property

Wreck removal

P&I cover for wreck removal

Towage

P&I cover for towage

Pollution

P&I cover for pollution

Loss prevention for pollution

Summary

 

OTHER P&I RISKS, EXCLUSIONS AND DISCRETIONARY COVER

Other risks and liabilities covered by P&I

Exclusions and risks not covered by P&I

Discretionary nature of P&I insurance

Summary

 

P&I CLAIMS HANDLING

Advising of the incident

Visitors to the vessel

Responding to the incident

Appointing experts

Establishing contact

Risk of arrest

Evaluating evidence

Submission of claim documents

Settlement negotiations

Possible indemnity claims

Choice of jurisdiction and law

Arbitration

Mediation

Early intervention

Interaction of P&I and H&M insurers

Claims handling following personal injury incidents

Claims handling following collisions

Summary

 

OTHER TYPES OF MARINE INSURANCE

Hull and machinery insurance

Increased value insurance

Freight, demurrage and defence insurance

War risks insurance

Summary

INDEX

Introduction

Ship’s masters, officers and those working within the shipping industry will be well aware that unforeseen incidents can and do occur. Fortunately, most of these incidents are minor and do not result in a claim against the ship or have repercussions. However, sometimes they can be more serious, and it is for the liabilities arising from these incidents that marine insurance, including protection and indemnity (P&I) insurance, is provided.

This chapter examines the development of marine insurance leading to the formation of P&I clubs and gives an overview of P&I clubs, including how they work with correspondents to provide a worldwide service. It also looks at the role of the International Group of P&I Clubs (subsequently referred to as the International Group or ‘IG’). Firstly, it is important to understand the insurance requirements of a ship operator and how P&I clubs provide an important component of that insurance.

SHIP OPERATORS’ INSURANCE REQUIREMENTS

Insurance exists to avoid or minimise financial uncertainty. In the case of a shipowner, insurance is usually confined to the financial consequences of damage to its own ship, death or injury to people, or damage to other people’s property. These are all risks that the insured person or company could not reasonably foresee or avoid.

There are two principal types of marine insurance:

  • hull and machinery insurance (H&M)

  • protection and indemnity insurance (P&I).

The shipowner may also have additional requirements for which other insurance cover is available including freight, demurrage and defence (FD&D) insurance, war risks insurance and strike insurance. These will be looked at briefly in turn.

Details

Title: An Introduction to P&I Insurance and Loss Prevention (Third Edition)
Edition: Third
Number of Pages: 225
Product Code: WS1702K
ISBN: ISBN 13: 978-0-9955653-2-6 (9780995565326), ISBN 10: 0-9955653-2-5 (0995565325)
Published Date: August 2019
Weight: 0.70 kg
Author: The North of England P&I Association Ltd