In a first, state-run New India Assurance forayed into protection and indemnity (P&I) cover for the inland and coastal vessels, which is dominated by international players.
"This is the first time that any domestic player has entered in the segment, which is dominated by international players under the exemptions given by the regulator," said G Srinivasan New India Assurance Company chairman and managing director.
As of now, there is no P & I club in the country as the ship owners buy cover from international market under the exemption permitted by IRDAI.
Initially, he said, the company will cover vessels in Indian waters including dry cargo, tugs barges among others.
" P& I cover is being launched at a small scale and with a limited sum assured, it w'ill prove to be a precursor to a well-established P&I capacity in the future in the Indian market, he said
We will extend it to ocean going vessels later," he added.
The sum insured for each vessel will be Rs 33 crore, (equal to USD 5 Mn) and there is no provision for any condition survey for vessels less than 10 years.
This product has been backed by reputed reinsurers and P&I Clubs of repute, Srinivasan said.
“With reinsurance support, we can stretch it by another $10 millio.Wehave already been issued to some clients.,” aid Sanjiv Singh, a deputy general manager at New India Assurance.
Alice Vaidyan, CMD, GIC Re, said , “We will be willing to increase our capacity to the programme in the future.’’
Among the risks to be covered with the product include third party liabilities arising out of the use and operation of coastal vessels, pollution, fines, collision liability, cargo liabilities, crew liabilities, wreck removal, general average, sue & labour, defence cover for legal costs .and war protection and indemnity cover.
Some of the main exclusions in the policy are:Failure to exercise reasonable care,War, nuclear risks, radioactive contamination,Cyber risks,Claim recoverable under the hull policy,Deductible under the hull policy
Director general of shipping, Malini Shankar said that with the development of Indian shipping and port infrastructure, such cover will be necessary for all the ship owners.
NIA has Correspondents , Surveyors and Panel of Lawyers to handle any P&I Incident at any port in India and a dedicated helpline 24 x 7 is being provided for the customer.
Internationally,P&I cover issued by London-based International Group of P&I Clubs, a 13-member group which insures close to 90 per cent of the world’s merchant ships, placing a $1-billion limit on individual claims that involve pollution damage and wreck removal.
Earlier, efforts of Indian public sector general insurers, including official reinsurer GIC Re and shipping companies to set up an exclusive entity known as P&I Club to provide cover to shipping companies had failed to take off.