Protection and indemnity insurance arose from the basic concept of the vessel owners to obtain mutual insurance for the eventuality of damage. The majority of the P&I clubs today continue to be mutual associations. Once a vessel owner becomes a member of one of these mutual associations, such vessel owner becomes a member, instead of the policyholder.
Besides the established P&I clubs, these days there are also providers who offer to cover P&I risks in accordance with the pattern of a classic insurance, i.e. every vessel owner holds an independent insurance policy.
It can essentially be said that a P&I club grants cover for third party liability claims. For this purpose, the P&I club makes use of of a global network of correspondents to assist with preventive measures as quickly as possible. By putting the insurance broker in between, it is ensured that a complex claim can be partially covered by both the hull insurance and/or P&I insurance so as to not leave a blind, uninsured spot. The hull insurance and P&I insurance together form the basic structure for insuring the vessel.
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