Table of contents
P&I cover is intended to give protection and comfort to shipowners and operators against the losses and liabilities that they regularly incur whilst engaged in shipping operations, and has been doing so for centuries. Since such cover is mutual in nature in the sense that Members indemnify each other against such risks and do not seek to make a profit when doing so, the scope of P&I insurance has been able to expand when necessary in response to the rapidly expanding character, scope and demands of shipping operations. However, such expansion has always been guided and restricted by the need to maintain the concept and requirements of mutuality. In other words, as the scope of risk and liability that is ordinarily and routinely faced by conventional ship operators has expanded, the scope of P&I cover has also expanded in response. However, some owners and operators are exposed to risks that are special to their particular form of shipping operation and which are different to the risks that are experienced by the majority of owners and operators. Claims arising from such special risks do not readily fit into the framework of mutuality. Such risks can result either from the specialist nature of the operations in which relatively few owners or operators are engaged, or from non-standard terms of contracts and other agreements that are used in a particular trade and which impose (often non-negotiable) liabilities that are more onerous than those that are normally imposed on conventional owners and operators by compulsory international and national laws.
The Association is sympathetic to the needs of such owners and operators to secure adequate insurance protection even though the risks are not capable of being shared on a mutual basis within the Standard P&I Cover that is reinsured through the International Group Pool. Consequently, the Association has developed a number of Additional Covers that are intended to meet such needs but which must necessarily be separately reinsured from the Standard P&I Cover. However, such additional insurances are normally offered to Members that already have Ships that are entered in the Association for the Standard P&I Cover and such additional insurances are intended to ‘bolt on’ to such Cover in order to provide cover where it is not available under the Standard P&I Cover.
All such Additional Covers are written by the Association (as insurer) on a fixed premium basis and are subject to a number of general provisions that are set out in Part I General Provisions of the Terms and Conditions. Most of these provisions replicate the general terms of the Rules that govern the Standard P&I Cover that the Association offers on a mutual basis, e.g. the duty of disclosure, alteration of risk, termination and cesser etc. Therefore, the Member, as Assured, should appreciate and be aware that the guidance that is given elsewhere in this publication as to the importance that such issues have to the Rules is equally applicable in relation to these Additional Covers.
Finally, it must be emphasised that, if the Association acts as the Insurer for the purposes of these Additional Covers, then unless the Assured already satisfies the definition of Member in Rule 1 of the Association’s Rules, the acceptance of him as Assured by the Insurer for the purposes of one or more of these Additional Covers does not give the Assured a right to be a Member of the Association.