Insurances keep a hand under your business in case something goes wrong. But which should you choose? Find out more about the P&I Club that goes back in history and your other insurance options in container logistics right here.
Insurance is one of those things that are often pushed to the side and we then tell ourselves that we will deal with later. Or it is simply something we don’t want to bother ourselves with the nitty-gritty details.
But on the seas and oceans around the world, things can get rough. There is bad weather. The containers can be stowed in a bad way. Accidents and injuries are liable to happen. That also means that as a shipper or freight forwarder it can be economically deadly not to be completely on top of your insurances.
Because figuring out who is responsible for compensating the damage can be tricky business. And a freight forwarder without insurance might end up with a big bill in their hand. A bill, where the freight forwarder is then responsible for covering the entire value of a claim.
If you’ve already been looking into the different insurance options in the shipping industry, you’ve most likely come across a P&I Club. So, let’s first dig into the DNA of the P&I clubs.
If you want to learn more about your insurance options here at xChange you can jump down to that part right here.
The big P&I Club
A P&I Club is an association that is owned and operated by the shipowner members. The name ‘P&I Club’ is how the insurance associations are most commonly known and referred to as. P&I is really short for Protection and Indemnity.
These clubs date back all the way to the 1800s where ‘Protection Clubs’ were formed. These clubs worked to help shipowners who were imposed liabilities by the British Merchant Shipping Act of 1854. In effect, the forefathers of the P&I Clubs that we know today.
Today, the 13 world-leading P&I Clubs provide liability cover for around 90 % of the world’s ocean-going tonnage. These 13 P&I Clubs have gone together and have formed one association known as the International Group of P&I Clubs.
P&I Club Past to Present
Just like back in the days, today’s P&I Clubs are insurances that cover against third party liabilities and expenses. They cover everything between:
- Collision damage
- Wreck removal
- Loss of life
- Personal injury
- Pollution damage
- Damage to property
If you’re not looking for broad range insurance, xChange might be able to help you. We offer container insurance against total loss and damage. Insurance that aims at reducing the risk and liability for you. Click on the banner below and learn more about the container insurances at xChange.
The three essentials
With the P&I Clubs, the three fundamental elements in the shipping industry are covered: The ship, the cargo, and the seafarers.
It’s important to keep in mind, that these P&I insurances give you an itemized risk coverage. That means that they only cover the risks that are specifically mentioned in the club’s rules. And these also vary depending on the nature of the risk and how much you need to have insured.
But even though the rules and conditions are different from one P&I Club to another, what is covered and how well, is very similar.
Brave new world
Over the years the shipping industry has been through a massive transformation, and so have the P&I Clubs. And with the evolvement in the industry, shippers and forwarders started demanding greater coverage from the insurances from the P&I Clubs. And so they got.
These broader insurances also mean that the P&I Clubs are liable to have to cover a bigger financial sum from claims such as environmental claims.
That is also one of the reasons, some of the P&I clubs have gone together and started an association. Because this way, they will share the burden of the claims. Just like the 13 leading P&I Clubs in the International Group of P&I Clubs we already talked about 👆
Other options than P&I Club
As we mentioned earlier, with the P&I Club the three fundamental elements in shipping are covered: The ship, the cargo, and the seafarers.
There are many things to consider when you draw up insurance. But one thing that is often overlooked is insuring the container itself. Container insurance covers the damage to the container. Not the cargo within it. However, that doesn’t make it any less relevant and important to remember.
Because there are many ways a container can be damaged when it is on its journey from point A to point B. And containers aren’t exactly cheap to reimburse. That is where the xChange insurances can help you.
xChange against total loss and container damage
At Container xChange we offer container insurance for the members on our platform. These insurances cover total loss, constructive total loss, mysterious disappearances, and container insurance.
You can choose between basic and premium insurance. Let’s have a look at what the two versions entail!
- Covers equipment that is a total loss for example if it mysteriously disappeared, is too damaged to be fixed or lost at sea.
- The basic insurance covers one-way moves.
- The insurance is valid up to 60 days from the day the equipment is picked up.
- After those 60 days, the insurance is automatically renewed unless you report on the platform that the container has been returned empty.
- The premium version covers all physical damage of a container. Including total loss. Containers can be damaged in many ways such as through bad weather, heat damage, vessel sways, and so on.
- Just as with the basic version, the insurance is in effect up to 60 days from the pick-up day.
- The insurance will be renewed every day afterward unless you report on the platform that the container has been returned empty.
With the xChange insurances, you reduce the risk and liability when you do one-way moves on xChange. Want to know more about the container insurances with xChange? Then click on the banner below and schedule a free demo!