P&I Club: What It Means
P&I stands for Protection and Indemnity. A P&I Club is a mutual insurance association — the members (shipowners) own the club collectively, and the club insures them against third-party liabilities.
History
P&I Clubs originated in 19th century Britain when shipowners began pooling resources to cover liabilities that commercial insurers wouldn’t take on — crew claims, cargo damage, and harbour damage from collisions. Today, P&I insurance is a fundamental part of every ship’s legal and financial protection.
What P&I Covers
Protection (liabilities to crew and passengers):
- Crew injury, illness, and death — medical costs and compensation
- Repatriation of sick or injured crew members
- Crew wages during hospitalisation
- Personal injury claims from passengers
- Loss of crew’s personal effects
Indemnity (liabilities to cargo and third parties):
- Cargo shortage, damage, or contamination
- Collision liabilities (the 1/4th not covered by hull policy)
- Oil pollution — MARPOL fines, cleanup costs
- Wreck removal
- Damage to port infrastructure
- Fines for regulatory violations
P&I and Seafarer Rights
Under MLC 2006 (Financial Security Requirements), all ships must maintain P&I or equivalent financial security to guarantee:
- 16 weeks’ wages in case of shipowner insolvency
- Repatriation costs
- Medical care
Certificates of Financial Security (MLC certificates from P&I Club) must be onboard and available to seafarers. If a company can’t show valid P&I certificate, seafarers have grounds to refuse sailing.
The International Group
The 12 major P&I Clubs form the International Group of P&I Clubs, which operates a reinsurance pool for very large claims (oil spills, major collisions) that exceed any single club’s capacity. Individual claims up to $10 million are handled by the member club; above that, the pool pays.
Know your P&I rights. If you’re owed unpaid wages or medical expenses, you have recourse. Chat with SailorGPT for guidance.