What is P&I- Protection and IndemnityNovember 13, 2018 by
Protection & Indemnity Insurance – What is it???
If you own a boat and have an insurance policy, you may have noticed in your policy you have Protection and Liability (P&I). Has it ever been explained? We will try to offer a brief explanation and highly encourage you to speak to your agent.
If you look at your policy and you don’t have P&I coverage, please contact a marine Insurance specialist like Gallagher Charter Lakes. This is a brief overview of P&I.
FOR THE VERY LARGE OCEAN VESSELS
P&I is liability coverage for the boat or ship owner. Most of the commercial ocean vessels and mega-yachts have their P&I through clubs in a risk sharing pool. These clubs don’t use standard forms so there could be some variability in the policy.
FOR BOATS COASTAL TO THE U.S. AND INLAND U.S.
For the U.S. P&I market standard forms are common. (SP-23, SP-38 and American Institute of Marine Underwriters clauses). P&I is the most broad of the liability marine insurance coverage available. As typical in most insurance policies, exclusions and conditions apply. The typical P&I liability covers:
Loss of life, injury and illness of crew members, passengers and other third parties, damage to cargo on board the vessel, damage to other floating objects not caused by collision, wreck removal costs, collision liability, damage to fixed objects, repatriation expense, damage to other property, fines and penalties, costs of resisting mutiny or misconduct, quarantine expenses, putting in costs, cargo’s proportion of general average, and defense costs.
In the U.S. these items are often part of your policy:
Bodily Injury - Property damage – Death on the High Seas Act – Wreck Removal Maintenance & Cure – Negligence for unseaworthy vessel – Damage in “Rem” – Defense in the Admiralty Jurisdiction
From an exposure standpoint, the most costly is Loss of life, Injury or illness, particularly the death or injury of a crewmember(s). You should also consider having - Jones Act and – U.S. Longshoreman’s & Harbor workers coverage if needed, based on your usage of your vessel
If your policy only has Watercraft Liability that typically only includes Bodily Injury and Property Damage. Ask your agent if Watercraft Liability protects you and your assets. If you have a personal umbrella policy, be sure the underlying limits are sufficient. One thing to remember is this part of the liability coverage pays defense costs and damages. Both defense costs and damages can escalate quickly in a lawsuit.
Be an Informed consumer of your Insurance policies. P&I can take some of the fear out of the unknown