P&I Clubs Insurance

The shipping industry requires a unique form of insurances large investments are exposed to considerable risks and unforeseen losses are always present in addition liabilities connected with the operation of a ship are numerous and immediate therefore a ship owner relies upon overall insurance cover to an extent that is practically but financially safe typical ship owners insurance includes hull and machinery insurance covering physical damage to or loss of vessel and equipment hull and freight interest covers the financial interest that a ship owner may have in the vessel beyond the insured value loss of hire covers loss of income as a result of damaged covered by the hull and machinery insurance war insurance P&I insurance covering certain third party liabilities the learning of reduced the vessel staff to the development of the P&I insurance the scope of the P&I insurance cover and how the mutual clubs are managed while whole insurance began in the 16th century P&I insurance did not develop until the 1850s at that time ship owners saw a need for cover of third-party contractual liabilities and other risks not covered by hull insurance in the early days the owner of a ship was often the owner of the cargo if the cargo owners interests were different the ship owner had full indemnity clauses from cargo owners the right to compensation in various countries was not well developed with respect to ship owners liability for personal injury or damage to property from 1850 onwards however third-party and contractual liabilities of ship owners increased cargo interests attack the indemnity clauses of freight agreements and gradually gained the goodwill of the courts ship owners liability for damage caused by his employees arose of society became increasingly aware of the ship owners social responsibility for the well-being of his employees this resulted in a considerable increase in liability for the ship owner and the need for insuring this risk the result was the establishment of one of the first P&I clubs in England within the past decades the development of Cree and I insurance has been remarkable it is now as important for the ship owner as any other insurance most countries require P&I insurance to left the vessel sale and the ship owners cannot afford to risk their fortune by not having P&I insurance P&I clubs are Mutual Insurance Association's many of which have been in existence since the 1850s they enable ship owners to protect themselves against the many legal liabilities to which they are exposed in the course of their business the clubs derive their economic strength from mutuality they are nonprofit organizations which collect premiums and if necessary levy supplementary calls in order to pay claims and to cover administrative costs protection and indemnity insurance covers ship owners charters and ship operators against liabilities arising in direct connection with the operation of a vessel the insurance covers the ship owners liabilities to third parties the insurance supplements the hull and machinery insurance please move the correct sentences to the boxes a ship owner or chitara becomes a member of a P&I Club by ensuring a vessel with the particular Association the entry is valid until cancellation or until the vessel is sold by the owner or wrecked a ship owner or a charter wishing to enter a vessel into a mutual P&I club provides the association with relevant information about the risks to be ensured the P&I club issues a certificate of entry merely as a confirmation that the vessel is entered into the Association the certificate of entry contains extracts of the insurance conditions the certificate of entry also refers to the association's statutes and rules in force at the time in question the following factors will influence the premium tonnage or size of a ship flag and type trading area type of cargo nationality of crew and type of crew contract and the performance of crew and ship management the premium comprises two elements advanced premium agreed between the owner and the club for an insurance year subsequently adjusted depending on the individual performance by the vessel owner supplementary contribution to be paid at the end of the policy year based on the performance of the whole membership of the P&I club according to the principle of mutuality the members share each other's risks and supplementary contribution will only be calculated to the extent it is necessary to balance out the year similar to other Insurance Association's P&I claps have arranged for reinsurance in order to protect the members against very large claims the 14 major P&I clubs have also formed the international group of P&I clubs the clubs within the international group cover almost 90% of the world's merchant fleet through this arrangement the club share major claims and by reinsurance for catastrophic claims the P&I insurer handles most of the claims the club has a large staff of claims adjusters within the organization and has also appointed correspondents in ports worldwide the correspondence of the clubs working close cooperation with the ship's agent in such matters as arranging surveys and appointing lawyers if legal proceedings are started the centralized claims adjustment through the club helps to develop the experience and know-how required to guarantee effective and rational defense against claims made against the ship owners liabilities incurred by ship owners occur throughout the world the legislation and legal practice will therefore vary accordingly the P&I club is nevertheless willing to cover a ship owner for any legal liability irrespective of the applicable legislation in short P&I cover has no geographical restrictions much of the everyday work at the P&I Club involves answering inquiries from members on current problems yet the greatest amount of the club's work focuses on the investigation and processing of claims for settlement the P&I underwriter is also engaged in rather extensive advisory work for prevention and limitation of the memberships liabilities by means of handbooks circulars newsletters and special magazines the P&I clubs also arrange for seminars on specific topics please familiarize yourself with the scope of the cover in the three areas protection risks personal injury and claims protection risks vessel and other property and indemnity risks the P&I insurance covers personal injury loss of life in respect of crew and third parties and operations to save life at sea medical hospital funeral and repatriation expenses in respect to sick or injured members of the crew repatriation expenses unemployment indemnities and loss of effects of shipwrecked crew expenses it's in connection with stowaways deserters and refugees extraordinary expenses incurred in cases of outbreak of plague or other diseases and quarantine and disinfection expenses the P&I insurance covers loss of or damage to any other ship boat or craft auto property on board them so far as such liability is not covered under the ordinary hull policy damage to any other vessel or property thereon without actual contact for example wash damage damage to docks piers jetties boys cables or other objects of a like nature and property thereon cost of compulsorily raising removing or destroying the wreck of the entered ship or any other ship sunken collision with or by the fault of the entered ship insofar as such liability is not covered under the ship's hull and machinery policy loss or damage for which a member may become liable under an indemnity given to the owners or operators of tugs craft cranes or other appliances used for towing loading or discharging insofar as such liability is not covered under the ship's hull and machinery policy oil or any other polluting substance escaping from an internship resulting in loss damage or contamination for which the member may become liable the P&I insurance covers claims for loss short delivery pilferage of or damage to goods intended to be or being or which have been carried in the entered ship fines imposed by government or custom authorities in respect of short or over delivery of cargo smuggling desertion presence of stowaways breach of immigration regulations cargoes proportion of general average and/or special charge is not recoverable by reason of a breach of the contract of carriage costs of Defence in a governmental or other enquiry incurred with the approval of the club and in any other case which the club considers involves a question of importance or principle to the members third party liability in respect of owned or leased containers or other transport devices nightclubs are non profit insurance associations which derive their economic strength from the principle of mutuality P&I clubs collect premiums and if necessary levy supplementary calls in order to pay claims and to cover administrative costs P&I clubs enables ship owners to protect themselves against the many legal liabilities to which they are exposed in the course of their business the owners of entered ships are called members and exercise their authority through the elected Committees of the clubs the liability covered by the P&I club is that which has arisen in direct connection with the operation of the entered vessel the P&I club will cover a ship owner for any legal liability irrespective of the applicable legislation

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