YOU ASK:

What does P&I insurance stand for?

WE ANSWER:

In the insurance world, the abbreviation P&I stands for "property and indemnity" insurance - the type of liability coverage which has been specifically designed for the owners of sea-going vessels, such as ships - which are used to transport cargoes for commercial purposes.

P&I insurance provides comprehensive liability protection against the liability risks ship owners are exposed to.

Who Needs P&I Insurance

Owners of ships or other type of water craft utilized for purposes of the business need P&I insurance because of the great number of liability risk exposures involved in their commercial operations. Since third-party liability may arise in a considerable number of incidents and situations, a commercial ship owner should have adequate liability protection.

The P&I insurance coverage is part of ocean marine insurance, together with other coverages such as cargo insurance, freight insurance and hull insurance.

Liability Risks Covered by P&I Insurance

P&I insurance provides comprehensive protection to ship owners against a number of liability risks arising out of negligence. Intentional wrongdoings are specifically excluded from P&I insurance policies.

P&I insurance covers liability risks of accidental nature, ranging from property damage caused by the ship to the bodily injury of members of the crew.

P&I insurance provides liability coverage in the following hypothetical situations:

  • If the ship collides with another ship, resulting in property damage to the other vessel;
  • If the ship causes damage to piers, docks, harbor equipment or installations;
  • If the ship causes damage or loss to the transported cargoes;
  • If passengers of the water craft or the crew suffer from bodily injury while on the ship.
  • If people outside the water craft, such as long shore or harbor workers are injured by the ship operations.
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