Hull insurance does not cover everything. Protection and indemnity (P&I) insurance is liability cover for shipowners against third-party claims—such as cargo damage, pollution, personal injury, and collision liability not covered by hull policies—typically provided through mutual P&I clubs.

Members pay calls rather than fixed premiums, sharing the cost of claims across the club. P&I cover is essential for trading, because many ports and charterers require evidence of adequate liability insurance. Clubs also provide legal support and loss-prevention advice.

Major casualties can produce claims that run into hundreds of millions of dollars. Reinsurance and International Group pooling arrangements spread the largest risks. For the shipowner, P&I is as fundamental as hull insurance.

• Liability insurance for shipowners
• Covers cargo, pollution, injury, and related risks
• Usually provided by mutual P&I clubs
• Required for most commercial trading