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What Is Marine Protection And Indemnity Insurance

  • Author :
  • TATA AIG Team
  • Last Updated On :
  • 16/03/2025
  • 2 min read

The maritime business world often suffers the aftermath of the perils of the sea, leading to loss of lives, property and assets. In such a scenario, it is crucial for ship and cargo owners to safeguard themselves with the help of marine insurance.

Along with the damage to their assets, ship owners must also brace themselves for third-party liabilities arising from lawsuits filed by third parties or owners of other ships for the loss of their crew, vessels, etc.

To do so, marine protection and indemnity insurance are necessary. Find out all about P&I insurance, its features, coverage, etc., in this write-up.

Marine Insurance in India: An Overview

Marine insurance is a type of insurance that offers coverage for damage to property during transfer from one place to another. In India, a marine insurance policy goes beyond water transport and includes transportation by rail, road, air, etc.

Under marine insurance, the owner can insure the cargo, machinery and equipment of the vessel, etc., from any damages occurring due to various perils during transit. Various types of marine insurance are available in India, such as freight insurance, liability insurance, cargo insurance, hull insurance, etc. Liability insurance includes indemnity insurance, which is discussed below.

Also Read: Features and Characteristics of Marine Insurance

What is Marine Protection and Indemnity Insurance?

Marine protection and indemnity insurance aims to protect the insured from all kinds of third-party liabilities and claims that may arise while transporting goods from one place to another.

It also covers the damages caused to third parties due to accidents, crew member deaths or injuries, lawsuits, etc. Thus, P&I insurance offers more than traditional protection to ship and cargo owners, safeguarding them from huge financial losses.

Coverage of Marine Protection Insurance

  • Medical Expenditure

Medical expenses can put a huge financial strain on the ship or vessel owners. Indemnity insurance covers the medical expenses incurred for crew members, passengers or other members in case they sustain any injury or illness due to the vessel in question.

  • Damage to Other Vessels or Properties

A third party may file a suit if the insured vessel causes any damage to their ship. However, marine protection insurance assists the insured party in paying the damage cost.

  • Loss of Life, Injuries, Illness

Insurance claims that may arise due to loss of life, injury or illness of the crew members or passengers will be settled under the P&I insurance plan.

  • Cargo Damage

The insurance also covers any damage to the cargo or passenger baggage on the insured vessel.

  • Repatriation

If any crew member of the ship dies due to an outbreak of any illness, etc., the marine P&I insurance covers the cost of repatriation.

  • Wreck Removal

This insurance also covers the cost of wreck removal if another ship sinks, and the insured party is liable for the wreckage removal. The cost of wreck removal can be substantial and is covered by insurance. It also includes the cost of removing the cargo from the wreck of the vessel.

  • Oil Spill/Environmental Damage

If the insured vehicle causes any environmental damage as a result of an oil spill or pollution, the insurance covers the cost of defence and settlement of a lawsuit.

  • War and Other Risks

Insured vessel owners are also eligible to get compensation for damage due to marine terrorism, seizure, capture, etc.

  • Towing Damages

You also get coverage for any towing damages that may occur when the vessel is being towed to enter, exit or move around the port. It includes the standard towing operations that are necessary for navigating safely in the ports.

What is Not Covered Under Protection and Indemnity Marine Insurance?

  1. Any payment which the insured owner is liable to make to any worker or other persons under any statutory acts, such as the Workmen's Compensation Act, etc.

  2. It excludes punitive or exemplary damages.

  3. It excludes any payment arising under a contract of indemnity with respect to equipment, fuel, containers, or property leased by or belonging to the insured owner on board the vessel.

  4. It does not include any cost of cargo or property being carried on the vessel.

  5. The policy excludes any payment with respect to metals, cash, negotiable instruments, metals or stones, and such rare or precious objects belonging to the insured vessel’s owner, crew member, master or officer.

  6. Payment in respect of fuel, wages, insurance, port charges, etc., arising due to awaiting a substitute for the master, crew member, or other persons will not be covered.

  7. There is no inclusion of fines and penalties to be paid due to overloading or illegal fishing.

  8. Contamination and pollution of real or personal property is not covered under indemnity marine insurance.

  9. It also excludes earthquakes and volcanic eruptions.

Note: It excludes all other payments as specifically mentioned in the policy.

Other Types of Marine Insurance in India

Liability Insurance Freight Insurance Hull Insurance Cargo Insurance
It includes the insured owner's legal liability that may occur due to physical injury or damage to third-party property. It includes charter liability insurance, ship repairers liability insurance, and marine protection and indemnity insurance. This insurance covers the loss of revenue arising due to damage or loss of goods during transit.  You get coverage for risks, such as delay, loss, damage, etc. It is insurance that protects the physical aspects of a ship, including the vessel's hull and machinery equipment. It covers risks such as explosion, collision, fire, etc. One may take this insurance to secure the goods or cargo against damage or loss during the transit. The goods are covered against theft, damage due to mishandling, loss due to natural disasters, etc.

Also Read: How Does Marine Insurance Work?

What are the Benefits of Marine Insurance?

  • Financial Security

    Marine insurance provides financial security to the insured, as it compensates them for the losses that may occur during marine business activities. Such security is essential for conducting international business, as any unexpected loss or damage can lead to financial loss.

  • Flexibility

    Marine insurance in India provides flexibility to the insured. Multiple types of plans and coverage options are available. One can choose the most appropriate coverage to suit the business requirements. It also allows the insured to adjust the coverage and customise the policy as needed.

  • Comprehensive Coverage

    The coverage offered under marine policies is extensive as it safeguards the insured against various types of losses. Some perils covered under marine policies include theft, fire, natural calamities, collisions, accidents, etc.

  • Liability Cover

    Liability coverage is another huge benefit of marine policies. Third party liabilities may occur unexpectedly during marine business activities. Payment of such liabilities may involve huge sums, which can cause financial losses to the ship owner. However, with marine policy, this compensation is taken care of, providing relief to the insured.

Also Read: Marine Insurance Claim Process

Summary

Marine protection and indemnity insurance is an essential cover that ship owners and those engaged in marine business must consider buying. It protects against third-party liabilities, which may occur unexpectedly, causing financial losses.

TATA AIG offers flexible and customised plans, including a marine open policy, which secures multiple shipments over the entire year. It protects against ship sinking, fire perils, jettisons, overturning, etc.

Frequently Asked Questions

What documents are required to file a marine insurance claim?

  1. The following documents must be submitted:

  2. Claim form

  3. Original invoice

  4. Survey report

  5. Bill of landing

  6. Insurance certificate/policy

  7. Shipment details

  8. Claim letter, etc.

Who should buy marine protection and indemnity insurance?

  1. Marine P&I insurance can be purchased by the following:

  2. Ship owners

  3. Charterers

  4. Cargo owners

Port authorities, terminal operators, etc.

Is marine protection insurance expensive?

The cost of marine protection insurance depends on various factors such as the value of goods, shipment size, etc.

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Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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