A P&I Club is a mutual insurance association owned by its shipowner members, covering third-party liability risks that standard hull insurance does not.
What P&I Covers
- Crew injury, illness, and death — medical costs, compensation, repatriation expenses
- Cargo damage or loss liability claims from cargo owners
- Pollution liability — cleanup costs and damages from oil or other pollution incidents
- Collision liability — the portion of collision liability not covered under hull insurance (traditionally covered up to a set fraction, with P&I covering the remainder)
- Wreck removal — costs of removing a sunk or grounded vessel
- Stowaways and other crew-related liabilities
P&I vs Hull and Machinery (H&M) Insurance
- H&M insurance covers physical damage to the ship itself
- P&I insurance covers the shipowner’s liability to third parties
Both are typically required for a vessel to trade commercially, and P&I coverage is often specifically required by port authorities and charter parties.
Mutual Structure
Unlike commercial insurers, P&I Clubs are mutual associations — shipowner members effectively insure each other, contributing calls (premiums) that fund claims across the membership, with surplus/deficit affecting future call rates.
Why It Matters to Seafarers
P&I cover is directly relevant to seafarers — crew injury, illness, medical repatriation, and wage claims in cases of company default are typically covered through the vessel’s P&I Club, making P&I details relevant in real seafarer welfare situations.
Exam Relevance
P&I Club structure and coverage scope is a standard Ship Knowledge topic in senior deck officer competency exams (Chief Mate, Master level).