Shipowners P&I

Why do I need Shipowners P&I Insurance ?

Shipowners Protection and Indemnity (P&I) insurance provides cover for the numerous legal liabilities that shipowners are exposed to during the operation of their ships. Examples include cargo damage, collision and jetty damage, crew injury and oil pollution. This list of exposures is growing rapidly as the IMO continues to create further regulations, inclusive of mandatory obligations to produce evidence of insurance cover to entitle port entry. Shipowners P&I has, therefore, become essential to the facilitation of international trade and the protection of shipowners from increasingly high profile risks.  

The principal Shipowners P&I risks covered by Maritime Mutual are as summarised below – specific details are contained in Maritime Mutuals Rules of Entry, Class I, Rule 4

risks covered

MLC Certificates

  • The MLC makes it obligatory for all ships engaged in ocean trading and over 500 GT to carry and post two separate MLC Certificates of Financial Security. 
  • The first MLC Certificate evidences compliance with MLC Reg. 2.5, Standard A2.5.2 and Guideline B2.5 relating to the repatriation and payment of wages to abandoned seafarers.
  • The second MLC Certificate evidences compliance with MLC Reg. 4.2, Standard A4.2 and Guideline B4.2 relating to compensation for death and long-term disability.
  • Maritime Mutual’s MLC Certificates are created promptly in pdf format and transmitted to members electronically. They are accepted globally for entry into port state parties to the MLC Convention.

MLC Certificate

Indicates MLC Certificate Requirement

Blue Cards

  • The CLC, Bunker Convention and Wreck Removal Convention make it obligatory for ships to carry Flag State Trading certificates confirming that liability insurance has been provided by an approved insurer. Without these certificates, a ship may not be permitted to enter a port.
  • Maritime Mutual has received global approval to provide the ‘Blue Cards’ required by Flag States to issue the necessary Trading certificates.
  • Maritime Mutual’s prompt provision of ‘Blue Cards’ and their priority electronic transmission to the Member’s nominated Flag State is now a firmly established process.
Blue Card
Indicates Global Blue Card Requirement

Defence and Legal Costs

Maritime Mutual P&I is designed to cover their shipowner Member’s exposure to legal liabilities which may arise in contract, in tort (negligence) or as a breach of maritime or other law. In addition to covering the direct cost of these liabilities, Maritime Mutual P&I also covers the expense of comprehensive and pro-active liability defence inclusive of survey, claims adjustment, legal advice and ultimate settlement on best terms for the Member.

Ship Collisions

Traditionally, H&M insurance covers the repair damage to ‘own ship’ plus ¾ of the liability for the damage and consequential losses to the other vessel (but only up to the insured value of ‘own ship’). Customarily, P&I covers the remaining ¼ plus any excess balance. In order to simplify the adjustment complexities of this split liability insurance and improve cover, Maritime Mutual offers the option to their Members of the benefit of full 4/4 collision liability under their P&I entry.

Contact with Fixed and Floating Objects (FFO)

FFO covers damage caused by contacts with jetties and fendering, shore cranes, navigational buoys and other 3rd Party property. It also protects against claims for consequential economic losses due to jetty damage closure and repair downtime. Maritime Mutual assistance includes attendance by specialist civil engineers to assess both the underlying cause and reasonable cost of repairs.

Cargo Damage and Loss

Damage and loss to cargo are normally covered by the shipper’s or consignee’s cargo insurance policy. In turn, the cargo insurer will then bring a subrogated and often aggressive recovery claim against the shipowner. Regardless of whether the claim is brought by cargo insurers or directly by cargo interests, Maritime Mutual Shipowners P&I will step in immediately to survey, defend against cargo insurers or other interests and, if necessary, negotiate settlement on best terms for the Member.

Injury or Death of Crew, Passengers, Stevedores, Pilots, etc.

Ships can be hazardous places, especially while working cargo. Claims for injury or accidental death to crew, passengers and other persons who come on board comprise one of the largest elements of P&I liability exposure. Maritime Mutual P&I provides cover for all of these risks, whether they arise under crew employment contracts or from alleged shipboard negligence.


Shipowners and their crews can sometimes be faced with criminal charges and fines arising from the breach of statutory regulations inclusive of accidental oil spills, evidence of crew smuggling and serious infractions such as the unlawful immersion of load line marks. Maritime Mutual P&I will cover all such fines as well as the expenses of associated enquiries and defence costs.

Crew Welfare and Maritime Labour Convention (MLC) Liabilities

MLC icon

The MLC now stipulates the framework content of crew employment contract terms and their enforcement. This includes payment of the cost of medical care and repatriation in the event of work place injury or illness. Compensation for loss of wages and pain and suffering are also entitled. Substitute seafarers will need to be engaged immediately to meet flag state minimum manning obligations. A written undertaking from approved P&I insurers must be available to guarantee the payment of crew wages and repatriation if the shipowners should cease trading. Maritime Mutual P&I provides cover for all of these crew risks, costs and MLC insurance obligations.

Pollution Liability

Blue Card icon

Ship source pollution liability is based primarily on three IMO convention that include MARPOL, the Civil Liability Convention (CLC) and the Bunker Convention. Breach of the MARPOL regulations can incur heavy fines and even imprisonment. Cargo oil spills, (regulated by the CLC) and bunker fuel spills (regulated by the Bunker Convention) will subject shipowners to a strict liability regime and wide range of claims for both clean-up costs and consequential economic loss. Maritime Mutual P&I provides cover for all of these regulatory exposures.

Wreck Removal

Blue Card icon

Shipowners liability for wreck removal is now decreed by the IMO’s Nairobi Convention. It entitles a formal port authority order against owners if a wreck poses  a navigational or environmental hazard. The resultant legal exposure is one of strict liability and limitation of liability is not generally entitled. Once H&M underwriters agree to an ‘in principle’ payment of a Constructive Total Loss (CTL), Maritime Mutual P&I will then engage to cover wreck removal expenses.