P&I Clubs Guidelines - Protection and Indemnity Clubs Guidelines

The business unit, which is the largest source of premium volume, provides liability-, property- and income insurances to shipowners and operators. Offering tailor-made covers to suit individual operators, as well as many non-standard P&I shipping covers.

Liability insurance, known as P&I insurance, protects the shipowner against third-party liabilities and expenses arising from the ownership and operation of ships. The insurance is provided through a mutual structure which means that the buyers of the insurance are effectively the insurer.

One of the particularities of the P&I clubs, is that they participate in a claims sharing and collective reinsurance purchasing arrangement through the International Group. The reinsurance programme is the largest in the world and has a capacity exceeding USD 5.5 billion. The arrangement, due to its size and structure, enables the clubs to significantly reduce their risk capital requirements in a cost-effective way.[citation needed] The resulting savings should hence over time be reflected in the premium levels shipowners pay for their P&I cover.

Property insurance covers the assured against losses that may occur to the vessel and her equipment as a result of an accident, while income insurance protects against losses where the ship is wholly or partially deprived of income as a result of it being out of operation. These insurances are provided by Gard on a commercial basis rather than through the mutual organisation. The earnings from this business are therefore retained for the benefit of the mutual members (the buyers of mutual P&I cover).