Answer
Protection and Indemnity (P&I) Clubs operate as non-profit mutual insurance associations. Shipowners pool their resources to share third-party liability risks. Premiums (called "Calls") are collected in stages:
- Advance Call (Estimated Total Premium): Collected at the beginning of the policy year (traditionally February 20th). It is calculated based on the shipowner's specific risk profile (vessel type, age, trading limits, cargo, and historical loss ratio).
- Supplementary Call: If the club experiences a year with exceptionally high casualty claims that exhaust the collected Advance Calls, a Supplementary Call is levied on all members to cover the deficit.
- Release Call: If a shipowner decides to leave the club or sell their vessel, they must pay a Release Call. This covers their share of any anticipated future liabilities for the "open" policy years during which they were a member.
- Overspill Call: An extremely rare collection triggered only by catastrophic global claims that exceed the club's massive reinsurance limits.