P&I club
Protection & Indemnity
Meaning
A P&I (protection and indemnity) club is a mutual insurer covering shipowners' third-party liabilities, such as cargo claims, pollution and crew injury.
Also written as P&I, Protection and indemnity, P and I club
P&I club explained
Most of the world's ocean-going tonnage is insured by the clubs of the International Group of P&I Clubs, which pool large claims and reinsure together. Charterers and terminals require evidence of P&I cover from a club in the Group.
P&I cover can be prejudiced if the owner agrees to unusual terms, such as delivering cargo without bills of lading and without a proper letter of indemnity.
Related terms
Hull and machinery
Hull and machinery (H&M) insurance covers physical loss of or damage to the ship itself, such as from collision, grounding or machinery breakdown.
Letter of indemnity
A letter of indemnity (LOI) is a charterer's promise to compensate the owner for any loss from delivering cargo without original bills, or at a changed port.
Bill of lading
A bill of lading (B/L) is the document issued for cargo loaded on a ship: a receipt, evidence of the carriage contract and a document of title.