On the occasion of the incident at Euroferry Olympia, an article by the Mentor Ombudsman for the P&I Clubs is republished.
According to the shipping rules, the good and reliable execution of maritime transport refers to the tripartite relationship between classification societies, insurers and mutual insurance associations P&I Clubs.
In short, Protection & Indemnity Clubs, are mutual insurance associations of ship owners, in order to repair uninsured losses during the movement of their ships. Mutual insurance associations cover their shipowners against certain types of risks, which for some reason are not taken by the insurers and thus the associations themselves undertake to repair the damage from these risks.
For this purpose, P&I Clubs have the organization of insurance companies, have a board of directors and raise funds from the contributions of their members. The contributions paid by each shipowner to the Club are proportional to the capacity of the ships he wishes to register, while they increase in the event of compensation being paid, which could not have been foreseen from the outset. In order to offset the financial burdens of the members, the P&I Clubs resort either to reinsurance or to cooperation with other associations, for the joint assumption of the compensations paid. Clubs select their members according to the credibility they enjoy in the shipping market.
Most P & I Clubs are based in London, and have been reduced to a shipping institution. The most important Club is the UK Club with offices in New York, San Francisco, Miami and Tokyo. They are followed by Gard based in Norway, Skuld based in Oslo and several more.
Protection & Indemnity Clubs provide their members with protection and liability, for certain categories of risks that are related to the following:
a) Liabilities to persons,
b) Liabilities with cargo management,
c) Liabilities to third parties,
d) Liability to third parties infringements of the legislation of the countries of transit or accession.
