Maritime enterprises may have to contend with international, national, state, and province laws for operations and damages claims. Protection & Indemnity clubs can help members remain compliant and support their maritime operations.
If you’re bringing a claim against a maritime entity, working with a Houston maritime injury lawyer can help. They’re experienced in negotiating Protection & Indemnity club claims and can help improve your chances of a successful resolution.
What is a protection and indemnity club?
Protection and Indemnity (P&I) clubs are non-profit insurance organizations that help members manage maritime claims and respond to maritime casualties. They offer risk pooling and representation for members, including legal assistance.
Traditional maritime insurance carriers (American International Group, Gard, etc.) provide shipowners with cargo and hull-and-machinery coverage. P&I insurance clubs provide insurance for more open-ended risks, such as third-party risks for cargo damage, environmental damage, and war.
All shipowners who use their vessels to transport people or goods through international waters must carry P&I coverage.
P&I claims handling
P&I clubs help members understand their liability for injuries or damages as well as their options to effectively resolve claims. It may also advise members of their legal exposure to a suit for damages.
When a member is involved in an accident or a claim covered by the P&L club, the club investigates the member incident, just as a traditional insurance carrier may. It may also negotiate a settlement on behalf of the member.
P&I clubs are permitted to represent members in mediation and arbitration. If you’re in a dispute with a P&I club member, you and your lawyer will likely be exploring your options with the club instead of the other party’s insurance carrier.
The goal is to help shipowners and operators reduce the cost of legal disputes and minimize their losses.
P&I maritime casualty management
P&I clubs also play a large role in coordinating responses to maritime accidents, including ship accidents like grounding, collision, or sinking. When an accident at sea happens, fast, practical action matters. P&I clubs can coordinate member efforts to protect lives and mitigate damage, including environmental impact.
A shipowner’s P&I club can help them avoid legal trouble by determining the jurisdiction of their operations in accident response situations. They ensure that responding members comply with the laws governing the incident.
Additionally, P&I representatives work with government agencies to coordinate accident response efforts and environmental organizations. This helps maritime rescue operations minimize contamination risk.
The role of protection and indemnity clubs in maritime insurance
P&I clubs provide third-party risk coverage and other coverage that traditional maritime insurance doesn’t provide. Clubs may offer third-party liability protection for personal injury claims from crewmembers, dock workers, and ship passengers. The financial protection extended by P&I clubs helps ship owners and shipping companies manage unforeseen liabilities.
These clubs operate on a mutual insurance model where members are insured and insurers. Members contribute to a common pool used to cover claims. Since P&I clubs are non-profit, any surplus from the community fund is typically returned to members through rebates or reduced premiums.
When does a P&I club pay my claim for damages?
Shipowners need additional insurance coverage because liability damages in a maritime accident can easily surpass the value of the at-fault ship.
If you’re a victim of a maritime accident, you have the right to file a claim for damages against the shipowner and the company they operate under. You may file a claim with their insurance company and the P&I club, or just one, depending on your situation. Your lawyer can help determine which laws apply and explain your legal recourse.
P&I clubs can cover damages that the ship owner’s regular insurance does not.
Legal advocacy in filing maritime claims
If you’ve been injured at sea, there’s a good chance that the vessel owner is a member of a protection and indemnity club. Therefore, your claim may be handled differently than other types of personal injury claims.
However, since P&I clubs function much like traditional insurance companies, the steps for filing the claim will be similar. Each club has its own claim filing regulations and processes, which can confuse people who have never encountered this type of insurance before.
Our Houston maritime injury lawyers can help you correctly file your claim and represent you in settlement negotiations, mediation, or arbitration with the P&I club. To learn more, please contact Havens & Associates at (713) 955-2215 for a free consultation.
