P & I Club Insurance
P & I Club Insurance
(www.skuld.com)
(Video No Room for Error:
http://www.ukpandi.com/loss-prevention/videos/no-room-for-risk/unsubtitled/)
Ex. 1 Pair work: Discuss the bolded terms in the text above
insurance cover
liabilities
claim
mutual insurance association,
club
etc.
Ex. 3 Find the verbs in the above text that take the following nouns as their
object:
__________ a claim against the ship
__________ the ship in a mutual insurance association
__________ legal liability
__________ P&I insurance cover for contractual liability
__________ assistance
__________ problems
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a. LOSS OF CREW
MEMBERS
PERSONAL
EFFECTS
III.
IV.
b. DEATH AND
PERSONAL
INJURY ON
BOARD THE
VESSEL
c. RUNNING DOWN
CLAUSE AND
FIXED OR
FLOATING
OBJECTS
d. REPATRIATION
OF SICK OR
INJURED CREW
AND HOSPITAL
EXPENSES
Ex. 5 Group work: Discuss the following P&I insurance concepts (terms) in your
group:
being loaded or discharged, and for which the owner or charterer can be held
responsible, i.e. shortage or damage to the cargo. Therefore,if a Bill of Lading is
signed and states that 10,000 sacks of potatoes are loaded and only 9,500 are
discharged then the ship (the owner or charterer, or both) may be held liable for the
loss. Usually, the cargo insurers will pay the person or company who owns the cargo
(the receiver) for the costs of loss or damage to that cargo. The cargo underwriters
will then seek to recover their losses from the shipowner or charterer. The P&I club
will usually take over the handling of such claims on behalf of the assured. This is
one of the reasons why evidence in the form of documentation, copies of the log book,
surveys of damaged cargo, copies of tally books, dated photos of loading in the rain etc
are very important in establishing the exact reason for the damage. There are certain
defences open to the shipowner, such as being able to establish that the packaging of
the cargo was not good enough to protect it during transportation. Ensure any damage
is surveyed and recorded.
Damage to cargo is the most frequent type of liability that confronts a shipowner.
Unfortunately, cargo damage is often caused by small mistakes.
An important function of the Bill of Lading (B/L) is to describe the condition and quantity
of the cargo as received on board. If the cargo is discharged in a different condition, or
in lesser quantity than that entered on the B/L, the shipowner may be held liable for the
damage or shortage.
OTHER P&I COVERED RISKS
Other risks covered include liability for stowaways, liability for oil pollution and other
types of pollution and legal liability for wreck removal if the ship sinks and is blocking
free navigation for other vessels. In short, P&I insurance is a very comprehensive
type of insurance cover which makes it easier for a shipowner or charterer to trade in
international shipping transportation. P&I is as important to a prudent shipowner as his
Hull and Machinery insurance cover.
SUMMARY
P&I is a special type of marine insurance. It is a liability insurance that a prudent
shipowner, manager or charterer needs, particularly if the ship is employed in
international trade. P&I insurance covers a shipowner or charterer for liabilities and
losses in direct connection with the operation of the ship. We often use the term third
party insurance to explain P&I.
Ex. 6 Supply the missing word in the right place in the sentence
LOSS OF OR DAMAGE TO CARGO
One of the major functions of Protection and Indemnity insurance is to a shipowner, or the charterer
of a ship, for or loss of, or damage to, cargo if there has been a of the contract of carriage. (cover,
liability, breach)
This breach of contract usually means that something has happened to the cargo while it was on
board the ship or being loaded or discharged, and for which the owner or can be held responsible,
i.e. or damage to the cargo. (charterer, shortage)
Therefore, if a Bill of Lading is and states that 10,000 sacks of potatoes are loaded and only 9,500 are
discharged then the ship (the owner or, or both) may be held for the loss. (signed, charterer, liable)
Usually, the will pay the person or company who the cargo (the receiver) for the costs of or damage
to that cargo. (cargo insurers, owns, loss)
The cargo underwriters will then to their losses from the shipowner or charterer. (seek, recover)
The club will usually take over the of such claims on behalf of the. (P&I, handling, assured)
This is one of the reasons why in the form of documentation, copies of the, surveys of damaged
cargo, copies of, dated photos of loading in the rain etc are very important in the exact reason for the
damage. (evidence, log book, tally books, establishing)
There are certain open to the shipowner, such as being able to that the packaging of the cargo was
not good enough to protect it during. (defences, establish, transportation)
any damage is and recorded. (ensure, surveyed)
Damage to cargo is the most frequent type of that a shipowner. (liability, confronts)
An important function of the is to describe the condition and quantity of the cargo as on board. (Bill
of Lading (B/L), received)
If the cargo is discharged in a different condition, or in lesser quantity than that on the B/L, the
shipowner may be liable the damage or. (entered, held, for, shortage)
OTHER P&I COVERED RISKS
Other covered include liability for, liability for oil pollution and other types of pollution and wreck
removal if the ship sinks and is blocking free navigation for other. (risks, stowaways, legal liability
for, vessels)
In short, P&I insurance is a very type of which makes it easier for a or charterer to in international
shipping transportation. (comprehensive, insurance cover, shipowner, trade)
P&I is as important to a shipowner as his insurance cover. (prudent, Hull and Machinery)
Ex 8 Match the text on the left with the corresponsing headings o the right
HOW YOU CAN HELP
a. No back letters
b. Put it in writing
c. Seaworthiness
d. Record the
damage
e. Is it damaged?
f.
Record
inspections
g. Safely stowed
h. Survey the
damage
i.
people away
Keep unidentified
j.
Tally
k. Protest
l.
Log it!
m. Surrender of
cargo
n. Weather reports
o. Keep wet cargo
separate
9. Remember the Master always has the final responsibility for the
seaworthiness of the vessel. Safely stow the cargo.
10. If you suspect that your cargo may have been damaged during the
voyage, inform the ships owners. They should then request Skuld to
arrange for a surveyor to meet you at your destination. Alternatively,
you can always contact your local Skuld correspondent. They are
instructed to immediately assist you in any way.
12. Lodge a sea protest at your next port of call and make sure a log
extract showing relevant entries is attached. Co-operate as much as
possible with the surveyor appointed on behalf of the owners at the
destination. If possible, the Master should attend the survey of the
damaged cargo himself, or have his Chief Officer attend.
13. Consult the local Skuld correspondent before giving permission for
unauthorised surveyors or lawyers to board the vessel. Protect the
owners interests by posting a gangway watch and, if necessary,
prevent unauthorised people from boarding the vessel. Keep copies
of weather reports
15. Record in the log book any known cause of damage to the cargo,
e.g. freak waves, heavy weather (particularly if you reduce speed or
alter course) etc. Also note any other event that may have a bearing
on the cargo carried, e.g. ventilation to avoid condensation, relevant
dewpoint readings in the cargo spaces and outside etc.
16. Cargo must only be delivered to the holder of the original B/L or his
agent. This important formality is usually attended to by the ships
agents, but if you do fi nd yourself in a diffi cult or worrying situation,
contact the local Skuld correspondent. Before leaving the subject of
damage or loss to cargo, it might be appropriate to recall Article 3,
paragraph 2:
Marine insurance companies and P&I, known as underwriters, indemnify the shipowner only
for damage and losses specified in the policy after the shipowner proves that such damage or loss has
occurred. This is determined by surveys, entries in the log, reports and statements submitted by the
master.
Making up proper reports and statements and getting statements from witnesses in case of
accident or casualty to the vessel or cargo or injury to a person, serves an important purpose in the
protection of your company's interests. This is time-consuming labor, but it is a necessary evil, and
one which cannot be avoided. Therefore, all reports and statements should be completed with the
least possible delay. All reports and statements should be clear, neat and legible.
Logbook Entries. In each case of accident or loss, or of fire on board, collision or grounding,
detailed entries should be made in the official log. In certain types of accidents, such as collision and
grounding, it is a good idea to make rough notes on a pad and enter them in the log in proper
sequence. If in doubt about whether to make an entry or not, a safe rule is to enter it in the log, but
only after it has been roughed out. Do not trust anything to memory. Write it down as soon as
possible after the occurrence, while it is still fresh in mind.
The Reports and Statements. Your company may want reports on special forms, on all
accidents, even those which do not ordinarily require a comprehensive report or statement.
In cases of injury to a person on the vessel, first aid should be rendered immediately. If in
port, and it is thought necessary, a doctor should be called or the injured person should be sent to a
hospital. Fill out Injury Reports and enter all details in the medical log, and, if a crew member is
involved, in the official log.
Accidents Going or Leaving Drydock. If your ship touches another vessel or craft, an
accident report should be made out. Due to the close quarters in some drydocks this type of accident
occurs occasionally. If your vessel was using her engine, a copy of the logbook and bellbook
covering the time should also be made up. Names of tugs used and their positions around the vessel
should be shown on a diagram. The pilot should also make a statement. A similar report is necessary
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if the vessel strikes any part of the drydock. Statements may also be required from the officer on
duty on the bridge and the man at the wheel and the lookout.
Cargo Damage. Cargo damage is a constant problem. Usually, it is the chief officer who must
write a statement and make a report giving the reason for the damage. If it was caused by salt water,
he should note in the statement that the hatches were properly battened down and the number of tarps
used on each. Provided all facts are correct, the statement and report are countersigned by you.
An abstract of the log (six copies) covering the period of the heavy weather should be made
up. The weather must necessarily have been extra-ordinarily heavy - not the rough weather usually
expected on the voyage. The log should show what steps were taken to avoid heavy weather damage
and to prevent laboring of the vessel - such as slowing down, changing course or ballasting. Such
entries in the log will be of assistance to your insurance department in fighting a claim made against
your company for damage to cargo. Any repairs to the vessel for damage attributed to the heavy
weather on that voyage should be noted in the logbook and in the statement.
Collision with Another Vesse1. First of all, fill out the required form sending one copy to
your insurance department. A number of statements and reports will have to be made. Therefore start
taking notes immediately or put an officer on the job. Don't forget to serve notice on the master of the
other vessel, that her company will be held responsible for all damage sustained by your vessel.
Request the addressee of the letter to acknowledge its receipt. Chances are he will not do this, and he
may even refuse to accept the notice. In all probability he will serve you with the same kind of notice.
Do not accept or acknowledge it even though you may have hit him amidships on a clear day when
his vessel was at anchor! Never admit liabillity or that your vessel was at fault. Leave that to your
company insurance department if they think it necessary. Don't give out any information and don't
allow anyone, with the exception of the authorities' officials, to examine the logbooks or bellbooks.
(a) That you made certain as to whether anyone was injured on either vessel.
(b) Whether the other vessel was in need of assistance. (Remember that if you can with safety you
must stand by her until she is reported out of danger).
(c) That you had bilge soundings taken hourly or oftener, as thought necessary.
(d) The extent of damage to your vessel as far as known.
(e) The names of witnesses-men who were on deck at the time.
QUESTIONS
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1.
2.
3.
4.
How does the Owner prove that the damage or loss has occurred?
5.
Who makes use of your reports or statements on the accidents, injuries, etc.?
6.
7.
8.
9.
10.
11.
What information on the weather during the accident should be entered in the log?
12.
Describe the procedures involved in reporting and recording the collision with another vessel.
13.
Why should you not admit any liability or a fault? Who is supposed to deal with it?
14.
What are the most important particulars to be noted in the ship's logbook or in the master's
statement?
EXERCISES
1) Company that indemnifies the Owner against damage to or loss of a vessel or cargo;
(
2. Societies covering the risks of loss of life, striking docks or shore installations, expatriation
expenses, hospitalization of crew, etc. (
)
3. Book where the important details of the voyage are entered every day; (
)
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5. Putting into a port of refuge, i.e. a port other than those provided in the C/P or voyage
)
schedule; (
6. Persons or company engaged in stowing cargo in the ship's holds; (
7. Pieces of canvas for covering the hatches, etc.; (
8. Space in the ship where water, oil and moisture are drained; (
9. Expenses incurred by the Shipowner in connection with running the ship under a C/P or
other contract; (
)
10. The act of throwing cargo and stores overboard in order to save the vesse1; (
2. Complete the letter below with the appropriate prepositional phrases (in brackets) and state
what the Master's intention is: (AT THE SAME TIME, AT A LATER DATE, IN REPLY,
HEREWITH, IN CONNECTION WITH)
Dear Sirs,
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Faithfully yours,
Master, MV NUTCRACKER
II GRAMMAR
1. Supply the missing form of the verb in brackets: (ADVISE, ARISE, CAUSE, GET IN TOUCH,
OCCUR, PROTECT)
Recife,
2315,
loaded
No. 5
carbon
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3. Cause III. Cause is also expressed by words (verbs, nouns) denoting cause or reason:
1) The officer must write a statement and make a report giving the reason for the damage.
2) The damage was caused by salt water.
3) The true cause of the damage was the inadequate stowage of cargo.
4) A large proportion of cargo claims arise from lack of or improper dunnage.
5) For this reason each accident report must be supported by extracts from the logbook.
6) The statement of the officer gave rise to large disputes.
Rephrase the sentences below following the above examples from (l) to (6) where applicable:
1. Fire in the engine room was caused by careless welding.
2. The fire occurred through the careless handling of the pumps.
3. The true cause of the damage is still unknown.
III TRANSLATION
Translate the following questions into English (to be answered and completed in drawing up an
Accident Report):
1. Koliki je bio gaz broda na pramcu i na krmi?
2. Koje su pomorske karte bile koritene (naziv, broj, datum i izdava)? Dan zadnje korekcije prije
nezgode?
3. Koliko je kompasa bilo na brodu? Da li su bili ispravni? (in good order)? iro-kompas?
Magnetski kompas?
4. Je li vrsta tereta mogla djelovati na (affect) kompas?
5. Je li oprema za spaavanje na brodu bila u skladu sa zakonskkim propisima (statutory
requirements)?
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Further reading
Protection and Indemnity Insurance
When you conduct a service for reward or third parties use your facilities, you have an exposure
to claims should something go wrong. The same applies to Shipowners or operators. You can
purchase insurance to cover these liabilities, namely P& I Insurance.
These three marine insurances, H&M, Cargo and P&I are linked and give the interests in a marine
adventure the insurance cover they need.
History
Marine Insurance Roots go back to Ancient Greek and Roman times.
Shipowners were faced with claims from 3rd parties with those ships they had been in collision.
A court ruling in 1836 found that following a collision hull cover did not extend to damage caused
by collision.
H&M Insurers acted quickly to address this gap but only provided 3/4th of the damage.
Original limitation was to the value of the ship itself, but this began to be exceeded, leaving
shipowners to find the excess.
Until 1870, shipowners could use the exclusions in their Bills of Lading to avoid liability for cargo
related claims. An incident occurred whereby it was deemed it lay outside of the exclusions and
the shipowner was liable and Club rules did not cover the cargo claim.
This and the ever increasing value of cargoes and the willingness of cargo interests to try and
recover their losses caused the shipowners to look at the cover available to them.
To cover cargo risks, known as Indemnity Risks, Indemnity Clubs were formed and the
already established Protection Clubs amended their rules to take on Indemnity risks and
Protection and Indemnity Clubs came into existence.
P&I stands for Protection and Indemnity. This is a specialist class of liability insurance protection
for ship owners and charterers. It is rather useless to go into deep details of P&I practice as most
of dedicated insurers are publishing their own guides into P&I world, however we would be
pleased to go into academic issues about P&I over a pint of beer with anyone interested!
The initial idea of P&I cover is to protect the ship owner's interests against claims from third
parties and to indemnify him in case ship owner is liable to compensate third party losses.
Normally you would face two "classes" of cover available from most P&I insurers, namely:
Class I - Protection & Indemnity (P&I):
This is general liability insurance, which would cover ship owners' liability for main exposures they
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occurrence in relation to the insured vessel. The Assured may opt for several different limits which
apply for different risks. All limits of liability are due to be set out in the policy.
Premium Is calculated individually. It depends on the limit purchased by the Assured, deductible
amount, vessels specification, type, trading pattern, loss record etc. Normally payable quarterly.
Our advantages
Since we are a specialty company with the main focus in MAT segment we appreciate and
understand features and patterns of our customers business. We differentiate by clear
understanding of clients expectations of transparent and effective services and do our best to
satisfy them.
We have diligently worked on such items of our products like:
arrangement of first class reinsurance protection with limit up to US$ 10,000,000
supported by Lloyds Syndicates and companies of international specialty insurance and
reinsurance market;
putting together of a network of professional and effective P&I correspondents in the main
ports all over the world;
arrangements of cooperation with friendly fixed-rate P&I facilities for the case to unite our
capacities when a high limit policy is required by our customer.
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