In order to assist operators navigate the sometimes confusing world of mutual P&I, the Shipowners’ Club has created an infographic to explain the different elements that make up mutual P&I.
P&I is the traditional name for the insurance shipowners purchase to protect them from the liabilities which arise from owning or operating a ship, such as claims from crew, passengers, and third parties.
A mutual P&I insurer is part of the International Group (IG), which comprises of 13 Mutual P&I clubs. By combining together, the clubs are able to speak with one voice and use their collective resources to offer very high insurance limits. All clubs operate independently by co-operating to share losses and purchase reinsurance for the benefit of all IG members.
The reputation and financial strength of the IG of P&I clubs means that Club security is accepted globally, generally without question, against losses, should things go wrong. Many have described this as the Gold Standard of vessel liability insurance.
All clubs that are part of the IG provide insurance on a notfor-profit basis. Under mutual insurance the income (money paid by Members as premiums) and outgoings (such as claims and expenses) must balance. If income exceeds outgoings the year is in surplus and this is used for the benefit of Members. However, the way in which each club asks for its income from Members can differ.
Explore more in the following infographic:
