Top Benefits of P&I Insurance for Modern Ship Owners

Introduction

P&I insurance plays a major role among shipowners, port operators, and businesses involved in operations like import and export. It helps to cover certain legal liabilities, helping your ships travel without any interruption. However, P&I, or professional indemnity insurance, is still a new concept for modern shipowners. With lots of new challenges and the dire need to update their knowledge and skills in advanced technology, many modern shipowners cannot comprehend the importance of this insurance coverage.Hence, this blog is here to help them understand the benefits of P&I insurance . It highlights how obtaining P&I insurance can help them grow their business with long-term peace of mind.

Top 7 Benefits of P&I Insurance for Modern Ship Owners

Provides defense and legal costs:

Professional indemnity insurance covers all sorts of legal costs that may arise due to cases of law violation, negligence, or any other mishap. Besides covering the direct expenses of legal liabilities, the insurance also provides adequate coverage for claims adjustment sessions, legal advice from professionals, ultimate negotiation or settlement, etc. Thus, insurance offers comprehensive coverage for legal and defense expenses.

Covers third-party collision risk:

Policies like hull & machinery insurance, sometimes with add-on coverage or sometimes just with its regular coverage, provide third-party collision liability coverage. But those only cover a certain part of the total estimated compensation for the damages. When combined with P&I insurance, the overall insurance coverage may include 100% of the expected amount that can cover third-party collision risks effectively.

Provides coverage for wreck removal cost:

Wrecks at waterbodies left by ships are likely to impact the environment and bring navigational troubles. Therefore, whenever any collision or other incident happens where shipwrecks are likely to be there at the waterbody, it becomes the shipowner’s responsibility whose ships are involved in it to remove the wrecks at the earliest. P&I insurance helps in wreck removal by covering the expenses for that purpose.

Covers fines and penalties:

Whether it is breaching maritime law in sea transit, or showcasing a negligent attitude while managing the ships, you, as a shipowner, may have to pay a certain amount as fines. Considering today’s fast-forward lifestyle and rampant criminal activities in various fields, the laws and regulations have become stricter than ever. So, the cost of penalties or fines is increasing gradually. Therefore, as a modern shipowner, to carry forward your ownership without any financial setback, you need to obtain professional indemnity insurance.

Compensates for injury or death of passengers and crew:

It is disturbing to seeInjury or death of the ship’s crew members . The compensation costs and legal fees may heighten stress and worry. Under professional indemnity insurance, you can get compensation for accidental death or injury of crew members or passengers. Whether the risk arises under crew employment contracts or from alleged negligence in respective activities, the insurance will get you cover for all these risks.

Meets MLC Insurance obligations:

According to Maritime Labor Convention (MLC) laws, you may be liable to pay for crew members’ medical expenses and repatriation costs in any event of workplace injury or illness. Not complying with this term may lead to the violation of MLC regulations followed by legal complications that no one ever wants to go through. Professional indemnity insurance helps to comply with the MLC law covering the crews’ medical cost.

Fulfills pollution liabilities:

Events like cargo oil spills, bunker fuel spills, shipwrecks, etc. may pollute the waterbody leading to the degradation of water quality. Because of such incidents, you, as a shipowner or an individual responsible for the shipment, may have to face serious legal hassles which can even end up in imprisonment. Additionally, not fulfilling pollution liabilities means heavy fines which you may have to pay within a stipulated time. The P&I insurance covers the financial responsibilities and keeps you safe from legal procedures.

So, whether it is crew injury, oil spills in the seawater, costly wreck removal issues, or third-party collision risks, Professional indemnity insurance safeguards your ship and your business from all sorts of risks.

About CoverB

As a reliable insurance advisor in the UAE, CoverB helps to obtain a wide range of marine insurance policies, including professional indemnity (PI) insurance. Shipowners, small and medium business owners, companies that manufacture and distribute high-value goods, and others associated with maritime shipments can obtain insurance effortlessly with the help of CoverB experts.

Final Words

Being a modern shipowner, you should be cautious enough about maintaining your reputation and financial strength, both of which can be ruined by not obtaining P&I insurance. Professional indemnity insurance works as a safety net when legal hassles come up due to any act of negligence, ship mismanagement, or non-compliance with relevant regulations. So, it is best not to ignore the policy and find a reliable insurance service advisor who can guide you about the details of the policy and help you obtain it without any obstacles, driving your business safer.