Protection and Indemnity Insurance - Your insurance against loss and liability to third parties
The P&I (Protection and Indemnity) insurance is Skuld's largest line of business. This insurance covers maritime liabilities incurred by the member in direct connection with the operation of the entered vessel. The cover protects our members against loss and liability to third parties.
Assuranceforeningen Skuld (Gjensidig) was established in Oslo in 1897 as the first P&I club outside the UK. The club survived through two major wars and is now established in nine countries. The local offices have market responsibility for the countries in their respective areas and provide service to local members, as well as all Skuld's members and clients trading in those areas. This provides worldwide close service to our members, with the advantage of local expertise.
For Skuld, service is the most important part of the P&I cover. In the event that a member is involved in a dispute with a third party, we will actively protect you, i.e. try to find a solution, and if, ultimately, you are found liable and suffer a loss covered under your policy, Skuld will indemnify you for your liability. We will also assist you in preventing losses. Loss prevention and advice from our claims executives are important elements of Skuld's service. P&I stand for mutual cooperation: we will work side-by-side with our members to achieve the best result in all claims situations and prevent claims by providing qualified advice. With our extensive experience of disputes and claims all over the world and our internal legal advisors from various backgrounds and jurisdictions, we are the recognised service provider.
P&I insurance covers maritime liabilities incurred by the member in direct connection with the operation of the entered vessel and is provided for all types of vessels. In addition, where the owner has a special exposure or requirement, we can always tailor cover to provide full protection. Skuld provides a wide range of ancillary covers to secure comprehensive cover for each member.
Skuld's P&I cover for owners is a mutual insurance. For more than 160 years, mutuality has been the old and tested principle for providing the most cost effective liability insurance for shipowners. From the start, shipowners created a mutual system where they decided to share their claims at cost only. The same principle applies today and creates a cover exceeding USD 7 billion.
The principle of shipowners sharing costs is based on sharing claims with fellow members in their own P&I club. Together, members in the 13 mutual clubs in the International Group of P&I Clubs (IG), share catastrophe claims in excess of USD 9 million through the "Pool". This is an extended risk sharing principle which means that when a claim hits the Pool, all shipowners in all the IG clubs share the claim. To protect the Pool, the Pool is covered by excess reinsurance layers totalling USD 3 billion. In addition to the reinsurance, the entire membership of the thirteen clubs, pool their liabilities up to in excess of USD 7 billion. This creates one of the largest, most cost efficient and unique covers for liabilities in the world, all controlled by the shipowner members of the P&I clubs.
The mutuality also involves premium contributions to the P&I club to cover the club's internal claims, pool claims and reinsurance of the pool. Premiums in the P&I system are named "calls", where the annual premium is termed as the "Estimated Total Call" (ETC) which equals the calculated premium contribution for the policy year. If the ETC is not sufficient to meet claims costs, the club may charge an additional supplementary call. Due to the time it takes to settle liability claims, all P&I clubs have to keep at least three years open. A shipowner entering one of the P&I clubs will thereby be liable to contribute for deficits in his club for the three open years.
Skuld has a strategy and long tradition to budget costs for each policy year to avoid any bad surprises for its members. Skuld has a history of more than ten years without any additional supplementary calls. Our members can therefore budget for their costs merely considering inflation and their own performance. This is a great advantage for shipowners, especially when engaged in long term charter arrangements. Skuld is therefore the most reliable and predictable partner for shipowners.
Skuld was the first club to introduce audited quarterly results to keep members informed of the club's progress. This transparency provides reliability and certainty for the membership.
When a shipowner selects to enter his ships in a P&I club, it is always the shipowner's decision which club to choose. The shipowner becomes a member of the chosen club and will share liabilities with the other members in that club. Skuld believes in total transparency and therefore provides updated figures of performance and developments on this website. Read more under "About".
Skuld's strategy is to provide and develop products to meet shipowners' requirements. Therefore Skuld can now also provide non mutual, Fixed P&I and a cover specifically developed for super Yachts. Read more on related pages in the right column.
With Skuld's Syndicate at Lloyd's, Skuld 1897, we are now able to offer a full range of marine insurance products. In addition, we will continue to develop new products to meet our members' and clients' needs.