The Ministry of Ports, Shipping and Waterways has held discussions on its proposal to set up a domestic protection and indemnity (P&I) club for coastal ships and vessels.
“At a recent roundtable of financiers and insurers, the ministry deliberated on the way forward for the setting up of this club,” a senior government official said, reported Business Standard.
“The idea is to start small. We are looking at a small corpus through a mutual insurance association of shipbuilders, shipping operators, and general insurers,” the official said.
At present, several coastal and riverine vessels are not covered under the P&I framework, as they operate in domestic waters. So, the local club will initially focus only on such vessels. Eventually, the P&I club would look at covering overseas shipping as well.
Meanwhile, a Finance Ministry panel said that the Insurance Act — in its present form — does not allow the operation of mutual insurance associations in the sector. The law will have to be amended to allow the formation of the P&I club.
In October 2023, Finance Minister Nirmala Sitharaman called for the establishment of a domestic P&I entity to offer insurance to shipowners.
