Cover

 WRECK REMOVAL LIABILITY

• Coverage Scope:

  • P&I insurance typically covers the liability for the removal of wrecks when they pose a hazard to navigation or the marine environment. This includes both legal obligations and voluntary actions taken to mitigate risks.
  • The coverage can include expenses related to the salvage operations, disposal of hazardous materials, and costs incurred by authorities.

• Legal Obligations:

  • Under various international conventions (like the Nairobi International Convention on the Removal of Wrecks), shipowners may have a legal duty to remove wrecks. Failure to comply can result in fines or additional liabilities.
  • National laws often require vessel owners to take action to remove wrecks, especially if they threaten safety or environmental integrity.

• Claims Process:

  • When a vessel becomes a wreck, the shipowner can file a claim with their P&I club for the costs incurred in wreck removal.
  • The club will assess the situation, considering factors like environmental impact, navigational hazards, and compliance with legal requirements.

• Limitations and Exclusions:

  • Not all wreck removal costs may be covered. For instance, costs associated with intentional wrecking or negligence may be excluded.
  • The specifics can vary by P&I club, so it’s crucial for shipowners to understand their policy terms.

• Environmental Concerns:

  • Wreck removal is often closely tied to environmental protection. P&I clubs may have protocols to ensure that wreck removal is conducted in an environmentally responsible manner, mitigating potential pollution.

• Importance of Coverage:

  • Wreck removal can be very costly, and without P&I coverage, shipowners could face significant financial burdens.
  • It also helps maintain safe navigation and protects marine ecosystems, aligning with broader industry standards for environmental stewardship.

OIL POLLUTION LIABILITY

• Coverage: P&I clubs typically cover liabilities arising from oil pollution incidents. This includes costs related to:

  • Clean-up operations.
  • Compensation for damages to the environment and affected parties.
  • Legal fees associated with claims and defenses.

• Legal Framework: The liability for oil pollution is often governed by international conventions, such as:

  • The International Convention on Civil Liability for Oil Pollution Damage (CLC).
  • The International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (Fund Convention).
  • The MARPOL Convention, which includes regulations to prevent pollution from ships.

• Limitations and Exclusions: While P&I insurance provides broad coverage, there are limitations:

  • Coverage might not apply to intentional pollution or negligence.
  • Specific exclusions may exist for certain types of incidents or materials.

• Contributions and Claims: When an oil spill occurs, affected parties may file claims against the shipowner. P&I clubs handle these claims, often involving complex assessments of liability and damages.

• Preventive Measures: P&I clubs also emphasize the importance of risk management and compliance with environmental regulations to mitigate potential pollution incidents.

CREW LIABILITY

• Coverage Scope:

  • P&I insurance typically covers liabilities arising from injuries or illnesses sustained by crew members while they are working on board. This includes medical expenses, repatriation costs, and compensation for loss of earnings.
  • It also covers claims related to death or disability of crew members, ensuring that their families or dependents receive appropriate compensation.

• Legal Framework:

  • Coverage is influenced by various international conventions, such as the Maritime Labour Convention (MLC) and national laws, which set minimum standards for crew welfare and protection.
  • Shipowners are often legally obligated to ensure the safety and well-being of their crew, which includes providing adequate medical care and safe working conditions.

• Claims Process:

  • When a crew member is injured or falls ill, a claim can be made to the P&I club for coverage of related costs.
  • The P&I club will assess the claim based on the circumstances of the incident, the terms of the insurance policy, and any applicable laws.

• Limitations and Exclusions:

  • P&I insurance may not cover claims arising from willful misconduct, gross negligence, or violations of safety regulations by crew members.
  • Specific exclusions can vary among different P&I clubs, so shipowners should carefully review their policies.

• Importance of Coverage:

  • Financial Protection: Crew liability coverage protects shipowners from potentially significant financial claims resulting from crew injuries or illnesses.
  • Legal Compliance: Having this coverage helps shipowners comply with legal obligations regarding crew welfare and safety standards.
  • Crew Welfare: It reinforces the importance of ensuring crew members’ well-being, contributing to better morale and operational efficiency.

• Crew Management:

  • P&I clubs often provide guidance on best practices for crew management, safety training, and compliance with health regulations to minimize risks and liabilities.

But, for Indonesian Crew the compensation must following “Peraturan Pemerintah Republik Indonesia No. 7 Tahun 2000 tentang Kepelautan”.

COLLISION LIABILITY

Collision liability coverage in P&I Insurance is crucial for shipowners, offering protection against substantial financial and legal risks associated with maritime collisions while ensuring compliance with relevant laws and regulations.

The Running Down Clause (RDC) and coverage for Fixed and Floating Objects (FFO) are important aspects of collision liability, and they interact differently with Protection and Indemnity (P&I) Insurance and Hull & Machinery (H&M) Insurance. Here’s a breakdown of the differences:

Running Down Clause (RDC)

• Definition:

  • The RDC is typically included in Hull & Machinery Insurance policies. It provides coverage for the shipowner’s liability to third parties for damage caused by the insured vessel in the event of a collision.

• Coverage:

  • Under the RDC, if a vessel collides with another vessel (third-party), the H&M policy will cover the damages to the other vessel, subject to the terms of the policy.
  • It protects the shipowner against claims for physical damage to the other vessel resulting from a collision.

• Liability:

  • The RDC often operates on a “no-fault” basis, meaning that liability can be established regardless of who was at fault for the collision.

• Definition:

  • FFO coverage pertains to liabilities incurred when a vessel collides with fixed structures (like docks or buoys) or floating objects (like other vessels or cargo).

• Coverage:

  • Under both P&I and H&M policies, damage caused to fixed and floating objects can be covered, but the approach may differ:
    • H&M Insurance: Covers the damage to the insured vessel resulting from a collision with FFO.
    • P&I Insurance: Covers the shipowner’s liability for damage caused to third-party property (like the fixed object) due to the collision.

• Focus:

  • P&I Insurance: Primarily focuses on liabilities to third parties, including damages to other vessels and property (like fixed objects), crew injuries, and pollution.
  • H&M Insurance: Covers physical damage to the insured vessel itself and may include the RDC for third-party damage.

• Claims Handling:

  • P&I Claims: Handled by P&I clubs, which assess liabilities and ensure compliance with maritime laws.
  • H&M Claims: Handled by insurers specializing in hull and machinery risks, focusing on physical damage and repairs.

• Legal Framework:

  • P&I coverage often hinges on international conventions and local laws governing maritime liability, while H&M policies primarily deal with contract terms regarding property damage.

• Focus:

  • P&I Insurance: Primarily focuses on the liability of the shipowner or carrier for cargo while it is in their custody. It addresses third-party claims for loss or damage.
  • Cargo Insurance: Purchased by the cargo owner (e.g., importer/exporter) to protect their own financial interest in the cargo. It covers the value of the cargo itself against risks such as theft, damage, or loss during transit.

• Policyholder:

  • P&I Insurance: Held by shipowners or operators, providing coverage against liabilities arising from their operations.
  • Cargo Insurance: Held by cargo owners, ensuring they are compensated for losses directly affecting their property.

• Coverage Purpose:

  • P&I Insurance: Aims to protect shipowners from legal and financial liabilities associated with carrying cargo, including damages to cargo claims made by the cargo owner.
  • Cargo Insurance: Aims to indemnify cargo owners for the value of their goods in case of loss or damage.

• Claims Handling:

  • Claims under P&I Insurance are handled by P&I clubs, focusing on liability issues. In contrast, cargo insurance claims are managed by the cargo insurer, focusing on the value of the goods.