Exam Question
(a) What are P & I clubs? Describe how P & I clubs collect fund from ship-owners.
(b) What are the risks that are covered under the term "protection" and "indemnity"
Class 1 (Chief Engineer)
Engineering Management
📅 Dec 2021
Reference Answer
### (a) P&I Clubs and Funding Mechanism
#### 1. Definition of P&I Clubs
P&I (Protection and Indemnity) Clubs are non-profit, mutual insurance associations that provide risk pooling for their members. The members are typically shipowners, operators, and charterers. Unlike standard insurance companies that operate for profit, P&I Clubs operate on a non-profit basis, aiming to provide insurance 'at cost'. They specialize in covering third-party liabilities and expenses arising from the ownership and operation of ships, which are not typically covered under standard Hull & Machinery (H&M) policies.
#### 2. Funding Mechanism
#### 1. Definition of P&I Clubs
P&I (Protection and Indemnity) Clubs are non-profit, mutual insurance associations that provide risk pooling for their members. The members are typically shipowners, operators, and charterers. Unlike standard insurance companies that operate for profit, P&I Clubs operate on a non-profit basis, aiming to provide insurance 'at cost'. They specialize in covering third-party liabilities and expenses arising from the ownership and operation of ships, which are not typically covered under standard Hull & Machinery (H&M) policies.
#### 2. Funding Mechanism
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