A. WHAT IS A P&I CLUB?

1.1 A P&I Club is an association of commercial shipowners and charterers and other associated parties, which provides protection against a number of risks inherent in industrial ship operation. The essence of P&I Clubs is that they are mostly mutual associations, where the members are both insured and insurers, contributing to claims via so-called “calls”. Whereas a shipowner’s hull and machinery insurance is designed primarily to protect the assured against losses to his vessel, the protection and indemnity insurance offered by P&I Clubs indemnifies an owner in respect of the discharge of legal liabilities he has incurred in operating his vessel.