Wednesday, May 29, 2013

Protection And Indemnity Insurance

Protecting marine items for shipping and other routine operations, owners may be required to have protection and indemnity insurance (P&I). This not only protects the owner in the event of a problem on the water, but it can also provide protection at the docks or in the shipyard.

Factors

Some of the factors that affect eligibility and cost include the type and size of the vessel, its value, how old it is and what materials were used for the construction. The amount of horsepower and how each vessel is used also figure into the calculations. Marine underwriters also take into account the expected distance and navigation limits, claims history. Where the cargo is stored and whether it is exposed can alter the coverage and its price.

Wrecks

Collisions and allisions between two ships or a vessel and the docks are common problems that cause wreckage which must be removed, cleaned up and repaired. Shipwrecks can also be caused by hidden obstructions and storms. On occasion, watercraft involved in collisions assume liability for damage that exceed the vessel's value. Policy coverage in these cases can make a significant difference in whether or not the company can recover from the expenses and continue operations. P&I insurance can minimize the affects of wrecks on a company's bottom line.

Passengers and Crew

When it comes to the safety of the ship's passengers and crew, the company that owns the marine vessel carries insurance in case there is an incident or problem. This includes injures and illnesses, as well as the loss of life. The size of the crew and the number of passengers carried on the watercraft affect the P&I insurance policy.

Environment

While most shipping and vessel companies try to avoid collisions and environmental damage, it does happen. Owners need protection in the event of ecological hazards caused by fuel discharge, overboard cargo and spills.

When choosing a P&I insurance policy, it is important for the vessel's owner to thoroughly read through and understand the coverage and its limits. In the event of a collision or incident, the insured should already know what's covered and what is not. In some cases, the owners may want to carry additional types of insurance that offers protection in case of incidents that are not included in the policy or have a limit in the amount that may be exceeded.

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