ANATOMY OF SHIPPING PI AND MARINE INSURANCE AIZOL

ANATOMY OF SHIPPING P&I AND MARINE INSURANCE § § AIZOL MUZZAMIL BIN AB WAHAB KAMIL BIN ASARI NUR AMIRUL FARHAN BIN AZMAN NUR FARAHIN BINTI MANSOR

P&I INSURANCE ØKnown as protection and indemnity insurance ØForm of marine insurance ØProvide by P&I Club ØCover the ship-owners, operators, and charterers for third-party liabilities

RELATIONSHIP WITH MARINE INSURANCE Ø Marine insurers offer insurance on measurable risks: hull and machinery insurance for ship owner, and cargo insurance for cargo owners. P&I clubs provide insurance for broader, indeterminate risks that marine insurers usually do not cover, such as third party risks. These risks include: a carrier’s liability to a cargo-owner for damage to cargo, a ship owner’s liability after a collision, environmental pollution and P&I war risk insurance, or legal liability

P&I CLUB Roles: Ø Manage claims Ø Act as central point of contact Ø Appoint experts, lawyers and correspondents Ø 24 hour emergency response Ø Pay claims and fees incurred Ø Advise on safety and loss prevention

CLASSES OF P&I INSURANCE Ø Class I - Protection & Indemnity (P&I): Ø This is general liability insurance, which would cover ship owners' liability for main exposures they may face in today's shipping, including : - Cargo - Crew - Passenger (and other persons carried on board) liability - Stowaways and refugees - Collision and contact with fixed or floating objects - Pollution - Wreck removal - Fines - Quarantine

CLASSES OF P&I INSURANCE Ø Class II - Freight, Demurrage & Defence (FD&D): Ø This insurance is covering ship owners' reasonable costs for necessary legal assistance in relation to disputes, which are directly connected with the operation of the insured vessel. Ø To make things simple P&I insurance providers could be divided in two categories: - Mutual clubs - Fixed price facilities

THE MAIN RISKS COVERED ØThe main risks covered are liabilities , expenses and cost for: § § § Lost of life, injury, illness Cargo loss, shortage or damaged Collision Pollution Fines and penalties

MARINE INSURANCE ØCoverage against loss or damage to a ship and in-transit cargo loss or damage over waterways, land, and air ØInclude Onshore and Offshore exposed property ØCargo insurance is sub-branch of marine insurance

CARGO INSURANCE ØTo cover goods in transit ØA loss is recoverable by an insured who at the time of loss has an insurable interest in the goods ØThe insurable interest or obligation to take out insurance