Class 1 (Chief Engineer) Engineering Management 📅 Nov 2023

Exam Question

(a) What are P&I clubs? Describe how P&I clubs collect fund from ship-owners. (5)

(b) What are the risks that are covered under the term "protection and indemnity"? (5)

Reference Answer

### (a) P&I Clubs and Fund Collection
**1. Definition of Protection & Indemnity (P&I) Clubs:**
A Protection and Indemnity (P&I) Club is a non-governmental, non-profit, mutual insurance association composed of shipowners, operators, and charterers. The fundamental principle is that members with common interests pool their resources and risks to obtain insurance coverage at cost for third-party liabilities arising from the operation of ships.
* **Mutual Association:** The club is owned and governed by its members (the insured shipowners) through an elected board of directors. It operates for the benefit of the members, not for external shareholders.

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