Exam Question
(a) What are P&I clubs? Describe how P&I clubs collect funds from ship-owners.
(b) What are the risks that are covered under the term "protection" and "Indemnity"
Class 1 (Chief Engineer)
Engineering Management
📅 Mar 2022
Reference Answer
### (a) P&I Clubs and Funding Mechanisms
#### Definition of a P&I Club
P&I (Protection and Indemnity) Clubs are non-profit, mutual insurance associations that provide risk pooling for their members. The members consist of ship owners, operators, and charterers. Unlike standard insurance companies that operate for profit, P&I clubs work on the principle of mutual assurance, meaning the members are both the insured and the insurers. The primary purpose of a P&I Club is to provide insurance cover for broad, unquantifiable, and often catastrophic third-party liabilities that are not covered by standard Hull & Machinery (H&M) or Cargo insurance policies.
#### Fund Collection from Ship-owners
#### Definition of a P&I Club
P&I (Protection and Indemnity) Clubs are non-profit, mutual insurance associations that provide risk pooling for their members. The members consist of ship owners, operators, and charterers. Unlike standard insurance companies that operate for profit, P&I clubs work on the principle of mutual assurance, meaning the members are both the insured and the insurers. The primary purpose of a P&I Club is to provide insurance cover for broad, unquantifiable, and often catastrophic third-party liabilities that are not covered by standard Hull & Machinery (H&M) or Cargo insurance policies.
#### Fund Collection from Ship-owners
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