Club System (P&I Clubs)

P&I Clubs, or Protection and Indemnity Clubs, are mutual insurance organizations that provide liability coverage for ship owners and operators. They protect against risks like collisions, environmental damage, and legal claims arising from maritime operations. Members pay regular dues, and the club covers certain costs if a claim occurs, sharing risks among members. This system ensures that ship owners are financially protected from large liabilities, promotes safety, and helps manage maritime legal and operational risks efficiently. Essentially, P&I Clubs function as a collective risk-sharing mechanism tailored specifically for the shipping industry.