Standard P&I cover

The purpose of Protection and Indemnity ("P&I") insurance is to shield the assured from the risk of his liability to others arising from his maritime activities. Unlike loss insurance, P&I responds to liability for damage or loss which the assured has caused to others. This insurance, which was originally intended for shipowners only, emerged during the second half of the 19th Century when it was determined that a shipowner who had caused damage to another vessel in a collision could not fully recover his liability for damage to the other vessel under his own hull policy. Modern P&I, available to shipowners and charterers alike, provides coverage for a wide range of liabilities and losses, including liabilities arising from the carriage of cargo; loss of life or injury to passengers, crew, and others such as stevedores; liability for removal of the wreck and its cargo; and liability for damage to or loss of other property, including pollution.

There are two unique features of P&I insurance. First, it is a mutual insurance, meaning that the assureds are also insurers, and in the event of extraordinary losses may be called upon to make a supplementary contribution exceeding their forecast premium. Secondly, the major insurers of P&I risks participate in a claims sharing and collective reinsurance puchasing arrangement called the International Group. The combined effect of these two features is a liability insurance with extraordinary limits (potentially USD 4.2. billion for one single event) at an accessible cost.

For further details of Gard P&I's standard P&I cover, see Gard P&I's Statutes and Rules.