P&I CLUBS

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P&I clubs are properly called 'protection and indemnity association'. These are the association of members shipowners and charterers owned and controlled by the insured shipowner or charterer member, for the purpose, basically, of mutual insurance against third party liabilities which arise in connection with the operation of ship. There are 13 members of the international group of P&I clubs ( and their 4 associate clubs) and a number of small independent clubs. P&I clubs are controlled by board of directors representing the shipowner members. Large claims are examined and approved by directors. Clubs are managed by firms of insurance experts, maritime lawyers and mariners operate on a non profit making basis. P&I club fund is contributed by its member shipowners. Each shipowner contribution is decided on the basis of
1) Tonnage
2) Types of ship
3) Experience of claim with the particular shipowner
     The premiums paid by shipowners are also referred as calls. Now the calls are divided in 3 parts
1) Advance call
2) Supplementary call
3) Over spill call
      Insurance premiums are reviewed annually on a per ship/ fleet basis. Average claim ratio over previous 5 years is taken into account to determine premiums. 

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