p & i clubs and claims related issues

P & I Clubs and Claims related issues

I represent M/s. Henderson International (India) Pvt. Ltd., for their P

& I Surveys and share my experience gained with them.

Presented by T.S. Shrinivaasan of MAR-TECH INSURANCE SURVEYORS & LOSS

ASSESSORS PVT. LTD.,

What is P & I Club ?

• P&I Clubs’ [Protection & Indemnity Insurers]) P&I Clubs are independent, non-profit making mutual insurance associations, providing cover for its Ship-Owner and Charterer members against third party liabilities relating to the use and operation of commercial vessels.

• Even Insurers also offer cover for ship owners. What is so special about P & I Clubs ?



P & I Club (v) Marine Insurer

• Both P&I clubs and conventional marine insurers are governed by the provisions of the Marine Insurance Act 1906

• Marine insurers also provide cover for known quantifiable risks, mainly Hull & Machinery insurance for ship Owners, and Cargo Insurance for cargo owners.

• But P&I Clubs provide insurance cover for broader indeterminate risks, such as third party liabilities which Marine Insurers are unwilling to cover.



http://en.wikipedia.org/wiki/Marine_Insurance_Act_1906

http://en.wikipedia.org/wiki/Marine_Insurance_Act_1906

What risks do P & I Clubs cover ?

Third Party Risks like the following:• Carrier’s liability to a cargo-owner for damage to cargo.• Ship’s liability after a collision.• Ship’s liability after an impact/contact.• Ship’s liability for environmental pollution.• Ship’s liability for war risks.• Personal injury to or illness or loss of life of crew

members or passengers• Personal injury to loss or loss of life of stevedores.• Loss of Personal Effects of Crew • List endless



P & I insurance (v) cargo Insurer

• Cargo Owners or Shippers also covers consignment for insurance.

• Carrier also has P&I cover.

• When a claim arises, the cargo-owner should first make a cargo claim against the carrier; but the latter may avoid liability because either (i) he did not cause the loss, or (ii) the Hague-Visby Rules grant exemption from liability.



http://en.wikipedia.org/wiki/Hague-Visby_Rules



HAGUE-VISBY RULES- BRIEF OUTLINE

• It is a set of International rules for the international carriage of goods by sea.

• It was first drafted in Brussels in 1924.• It was amended in 1968 and 1979.• By virtue of these rules, ship owners are exempted from

following claims: Loss by fire, perils of the sea, Act of God, & Act of war.

• They also exempt a controversial provision viz:"neglect or default of the master in the navigation or in the management of the ship”

• This provision is considered unfair to the shipper; and both the later Hamburg Rules and Rotterdam Rules refuse exemption for negligent navigation and management.



http://en.wikipedia.org/wiki/Ship_transport

http://en.wikipedia.org/wiki/Hamburg_Rules

http://en.wikipedia.org/wiki/Rotterdam_Rules

P & I Clubs Claims

• Going back, when the carrier exempts claims as above, naturally Claimant will resort to their Insurer for claims.

• Insurer may admit the claim after obtaining subrogation rights from Insured.

• By subrogation rights, Insurer will go for recovery against Carrier.



P & I Club Claims – Collision

• While H & M Insurer admits 3/4th liability, P & I club bears the balance 1/4th liability.

• Collisions may be classified as follows:

• Where one vessel is solely to blame

• Where both vessels to blame

• Where negligence is not proved against either vessel (force majeure or inevitable accident)



p & i clubs and claims related issues

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