Hull or P&I – Where Do You Have Your Third Party Liability Insurance?
Damage to your vessel is covered under the hull insurance policy ref. chapters 10-12 of the Nordic Marine Insurance Plan (NMIP). Issues regarding damage to other property, including other vessels, quays, buoys, dolphins, locks, etc., caused by direct contact may also be hull insurance matters, if liability is specifically covered under your hull insurance ref. chapter 13 of the NMIP.
Your P&I (Protection and Indemnity) insurance may also cover liability to third parties. This includes personal injury, cargo damage, and liability for oil pollution. Additionally, damage to third party property not covered under the hull policy may be covered by the P&I Club under their own conditions.
Property damage arising out of direct contact between your vessel and another vessel or fixed or floating object is often covered by the vessel’s hull policy, but the boundary between P&I and hull insurance is not always clear. For example, equipment that is not used to discharge or load cargo is regarded as a part of the ship and is hence covered under the hull insurance, whereas liability for equipment that is used for loading activities is normally covered by the P&I insurer. Of course, no two casualties are ever alike, so it is highly recommended that you contact both your hull and your P&I insurers to discuss the claim coverage. Since it is often difficult to differentiate between hull and P&I liability, we have illustrated the most common types of property damage below.
Claims Related to Direct Contact or Collision
If covered by chapter 13 of NMIP, the Hull Insurer handles damage to property belonging to a third party when caused by direct collision by the insured vessel.
Contact damage with other vessels
Contact damage to quay, piers etc.
Contact damage to dolphins
Contact damage to fixed and floating navigation aids
If covered by chapter 13 of NMIP, the Hull Insurer handles damage to third party tugboats assisting the vessel that is caused by direct contact with the insured vessel, provided there is contractual liability on the assisted vessel.
The P&I Insurer handles any other claims relating to assisting tugboats.
The P&I Insurer handles claims relating to third-party property during loading and discharging:
Damage to quay caused by the use of a ramp
Damage to third-party property caused by the use of a crane
Damage to third-party property caused by the use of other loading/discharging equipment
Damage to quay caused by the use of a gangway
Damage to quay and piers caused by moorings
Claims Related to Indirect Contact
The P&I Insurer handles damage to third-party property caused by wash or surge.
Claims Related to Use of Anchors
If covered by chapter 13 of NMIP, the Hull Insurer handles contact damage to pipes, cables, etc., in connection with emergency use of anchors to avoid accident.
The P&I Insurer handles contact damage to pipes, cables, etc. on the seabed that is caused by ordinary use of an anchor.
Claims Related to Oil Pollution
If covered by chapter 13 of NMIP, the Hull Insurer handles oil spills on the insured vessel’s deck and sides (partial only) resulting from ruptured cargo lines etc., or over bunkering. The Hull Insurer also handles oil spills inside the dry dock resulting from damage repairs and their clean up.
The P&I Insurer handles oil spills on the lower part of the vessel’s sides, and seawater pollution.
For further information, please contact your local claims office.
Sources: NMIP of 2013 and its Commentary
Disclaimer: These guidelines cannot be construed as a complete and binding answer to all of the possible problems and questions that can arise in connection with the topic addressed.