OWNERS’ P&I

WHO CAN BE COVERED

Membership of our club is generally open to registered owners, operators, managers or charterers of a ship. However, if you are a registered owner, it’s likely that you might be part of a corporate structure that includes other legal entities that could incur liabilities that arise from the operation of a ship. In these circumstances we will only consider a limited number of companies for full cover, either as a Member or as a co-assured. If your company falls outside the categories that are entitled to full cover, it may be added as an ‘associated company’, but only in so far as the Member would be able to pay, had the claim been directed against them.

THE RISKS THAT WE COVER

The major areas of cover provided today are:

1. Loss of Life, Personal Injury and Illness
   • Member of the Crew
   • Any other Person
2. Damage to Property
3. Collision Liability to Ships
4. Removal of Wreck
5. Pollution
6. Liability to Cargo
7. Contracts of Indemnity or Guarantee
8. Unrecoverable General Average
9. Fines

The basic rule governing P&I cover is that the liability or loss must arise:

• In respect of the Member’s interest in an Entered Ship; and
• Out of events occurring during the period of entry of the Ship in the Association; and
• In connection with the operation of the Ship.

This basic rule has three distinct parts.

1. The liability or loss must arise in respect of the Member’s interest in the ship.  The Member might, for instance, be the owner of a terminal and, as a result of a casualty involving both the entered vessel and terminal, be sued in his capacity as terminal owner.  However, the P&I cover will only respond to liabilities incurred by the Member in his capacity as the owner or operator of the vessel.
2. The event must occur while the ship is entered.  Damage to cargo, for instance, which occurs prior to entry of the ship, will not be covered, even though a claim does not materialise until after the vessel has been entered.  Equally however cover for cargo liabilities will continue after the vessel has left the Club, provided the cargo damage occurred during the ship’s period of entry.
3. The liability or loss must arise in connection with the operation of the ship.  The Member will have business activities, other than the operation of the entered vessel, and will not be covered for liabilities arising from these activities.  For instance, a liability might be incurred under a contract of affreightment, where no particular vessel has been nominated, and cover will not apply.