Protecting you through
a turbulent seascape

Remove the uncertainty

Driven by global challenges, todays shipping industry often finds itself in a turbulent seascape and despite all best efforts, accidents do occur. Covering practically all maritime liability risks, P&I insurance has become more relevant and necessary today than ever before.

Remove the uncertainty

What is Protection and Indemnity (P&I) insurance?

Protection and Indemnity Insurance (P&I) protects shipowners from third-party liability risks associated with owning and operating a vessel. It is one of the key coverages of ocean marine insurance, alongside hull coverage and cargo coverage.

There is no standard insurance form for P&I coverage, though most will cover losses related to illness, injury, loss of life, medical expenses, damage to other vessels and property, damage to cargo, wreckage removal, pollution, fines, general average and quarantine expenses.

HDL have access to the Global Protection and Indemnity Insurance Market, including the International Group of Protection and Indemnity clubs – the premier P&I insurers in the world.

Touch base with us to learn how we can help you.

Who should consider it?

Vessel owners are exposed to a variety of unique third-party liabilities that could result in costly claims and lawsuits. The physical threat that ocean vessels can pose to other ships on the water, the dangers of carrying crew and passengers on board a moving vessel, and other potential damages for which the vessel may be responsible make Protection and Indemnity Insurance an important aspect of any shipowner’s comprehensive coverage plan.

Gripping stories in the news about ocean voyages taking a devastating turn illustrate how important liability insurance is for owners and operators of ships. The Deepwater Horizon oil spill in 2010 discharged 4.9 million barrels of oil into the Gulf of Mexico and instigated one of the largest environmental disasters in U.S history. The MW Sewol passenger ferry in South Korea capsized near the Jeju coast and resulted in the death of 304 passengers and crew in 2014. More recently, a Norovirus outbreak sickened 475 passengers on a Caribbean cruise ship in January 2019.

What unique risks does a vessel pose to the people, property, and the environment around it? In the case of the tanker’s oil spill, it would be millions of dollars worth of environmental damages that could generate numerous civil lawsuits. The deaths and injuries of the people on board the ferry would lead to claims and lawsuits. Similarly, the outbreak of the virus on the cruise ship could result in a significant number of claims and legal settlements for medical expenses. As an owner of a vessel, are you prepared to face liabilities that could be financially devastating? P&I insurance will cover the third-party liabilities that might arise from owning and operating a vessel.

Importantly, every major Australian Port will require commercial vessel owners and operators to maintain some form of Protection and Indemnity Insurance in order to operate within the Port confines.

HDL, the right partner for you.

Did you know?

19,000

Nearly 19,000 ships passed through the Suez Canal in 2020, an average of 51.5 ships per day.

(Suez Canal Authority)

50%

Together, grounding, collision and contact incidents account for half of all shipping incidents in the Suez Canal over the past decade.

(Suez Canal Authority)

Cardiovascular disease

The most common illness on board vessels is cardiovascular disease, which is also the most costly.

(The Swedish Club)

What can it cover?

Common categories of coverage for Protection and Indemnity Insurance are the following:

Type of cover	Potential benefits
Illness, Injury, and Loss of Life	This is the primary coverage for P&I insurance. The coverage for illness, injury, and loss of life will apply to crew members, passengers not covered by an injury compensation act, and even stowaways. People working in close proximity to the ship are also covered, e.g. longshoremen working on the docks.
Medical Expenses	This covers hospital and other related medical expenses for passengers, crew, and nearby workers who have suffered injuries or illness as a result of the ship in question.
Damage to Other Vessels or Property	This covers damage to other vessels and fixed properties in the water such as piers, docks, and harbor equipment, both by collision and other causes, excluding coverage already provided by hull insurance.
Damage to Cargo	This coverage applies to cargo and passenger baggage. For example As a cruise ship is loading passengers for its maiden voyage, a porter loses control of a luggage cart off the pier, and several pieces of luggage fall into the harbour. Passengers end up suing the cruise line over the damaged luggage.
Wreck Removal	This covers clean up costs of wreckages, which is often required by law even if the shipowner is not at fault for the wreckage.
Quarantine	This covers the losses resulting from imposing a quarantine on board a vessel.
Repatriation	This covers the cost of repatriating any member of the crew.
Oil Spill and Pollution Civil Liabilities	This covers the cost of defending and settling civil lawsuits that arise out of oil spills and pollution caused by the vessel.
War and Political Risks	This covers war and marine terrorism risks, including capture, seizure, detainment, and other politically motivated actions.

What are P&I Clubs?

Most Protection and Indemnity Insurance policies are provided by non-governmental, nonprofit mutual or cooperative associations called P&I clubs. Comprised of shipowners, operators, charters, and seafarers, P&I clubs trace their roots back to 19th century England. Since insurance underwriters in that era were reluctant to take on third-party cargo liability risks, shipowners responded by forming their own mutual P&I clubs.

As shipping became a more popular mode of transportation in the latter part of the 19th century, third-party liability claims increased, and larger protection associations formed. P&I clubs originated in London but spread to other major shipping hubs including China, Japan, Norway, Singapore, Sweden, United Arab Emirates, the U.S., and South Korea.

Today, 13 P&I clubs around the world have joined together as the International Group of P&I Clubs, an association that provides insurance coverage for 90 percent of the world’s ocean-going tonnage. Club members contribute to a risk pool that pays out funds when a member’s ship faces losses. P&I Clubs offer very high insurance limits that protect against devastating losses on the sea.

Complimentary Review

Securing optimal insurance protection is becoming more challenging.

Having a fresh set of eyes can make a dramatic difference. HDL welcomes the opportunity to evaluate and challenge your current risk and insurance program in a confidential manner that avoids disrupting existing relationships.