Protection & Indemnity (P&I) Insurance is a form of marine liability insurance that protects shipowners, operators, and charterers against third-party risks associated with vessel operations. Unlike Hull & Machinery (H&M) insurance, which covers physical damage to the ship, P&I insurance focuses on legal and financial liabilities arising from incidents such as crew injuries, passenger claims, cargo damage, pollution, and wreck removal. It also covers damages caused to other ships or structures due to collisions, as well as legal defense costs and fines imposed by regulatory authorities. P&I insurance is typically provided by P&I clubs, which are mutual insurance associations where shipowners pool their risks to ensure collective financial protection.

This insurance is crucial in the maritime industry, where compliance with international regulations and environmental laws is becoming increasingly stringent. Shipowners face significant risks, from oil spills and environmental damage to legal claims from injured crew members or passengers. P&I insurance helps mitigate these financial burdens, ensuring that shipowners can operate without the fear of catastrophic liabilities. It works in conjunction with Hull & Machinery (H&M) insurance to create a comprehensive risk management framework, safeguarding both the physical assets and legal responsibilities of maritime businesses. This dual coverage system is essential in maintaining the stability and sustainability of global shipping operations.