Answer
Risk / Incident | Hull & Machinery (H&M) | Protection & Indemnity (P&I) |
|---|---|---|
Physical Ship Damage (Collision, Stranding, Fire, Heavy Weather) | Covered (Covers repair costs to hull, main engine, auxiliaries, and fittings). | Not Covered. |
Machinery Breakdown | Covered (If caused by an insured peril, crew negligence, or latent defect; excludes normal wear & tear). | Not Covered. |
Cargo Loss or Damage | Not Covered. | Covered (Liability to cargo owners under Bills of Lading / Hague-Visby). |
Collision Liability | Covers 3/4 (Traditionally covers three-quarters of legal liability for damage to the other ship). | Covers 1/4 (Covers remaining one-quarter, plus unrecoverable excess liabilities). |
Damage to Fixed/Floating Objects (FFO) (Dolphins, Piers, Cranes, Buoys) | Not Covered (Excluded under standard UK/Institute Clauses, though some Nordic/German plans cover it). | Covered (Standard 100% liability coverage for shore/port infrastructure). |
Oil Pollution & Environmental Clean-up | Not Covered. | Covered (Covers clean-up costs, fines, and environmental restoration up to statutory limits). |
Crew Injury, Illness, Repatriation, or Death | Not Covered. | Covered (Medical costs, crew repatriation, disability, and death claims). |
Passenger / Stowaway / Diver Liabilities | Not Covered. | Covered. |
Wreck Removal | Not Covered. | Covered (Mandatory removal of a sunken or stranded ship ordered by authorities). |
Particular Average (PA) | Covered (Partial damage to the owner's own vessel). | Not Covered. |
General Average (GA) | Covers Vessel's Share of GA sacrifices and expenditures. | Covers Cargo's Share (When cargo owners legally refuse to pay GA due to unseaworthiness). |
Salvage & Sue/Labor | Covered (Salvage awards for saving the physical ship; property preservation costs). | Covered (Lifesaving salvage, or measures taken purely to prevent liability/pollution). |
Fines (Customs, Port Authorities, Pollution) | Not Covered. | Covered (Covers most administrative and statutory fines, provided no intentional misconduct occurred). |
Practical Examples
Scenario A: Ship Collides with Another Ship (Ship-to-Ship Collision)
- Damage to your own ship: Paid by H&M.
- Damage to the other ship (3/4 of liability): Paid by H&M.
- Remaining 1/4 damage to the other ship: Paid by P&I.
- Personal injury to crew on either vessel: Paid by P&I.
- Cargo loss inside the other ship or your ship: Paid by P&I.
Scenario B: Ship Allides with a Port Jetty / Crane (Fixed & Floating Object)
- Damage to your own ship's bow: Paid by H&M.
- Damage to the berth, jetty, or shore crane: Paid 100% by P&I.
Scenario C: Main Engine Crankshaft Seizure / Blackout
- Repair of crankshaft and engine components: Paid by H&M (provided it resulted from an insured peril like lube oil pump failure or crew negligence, not pre-existing wear and tear).
- Claims from charterers/cargo owners for delayed delivery due to the engine failure: Paid by P&I.
Scenario D: Major Grounding and Oil Spill
- Refloating the vessel & hull repairs: Paid by H&M.
- Oil spill containment, clean-up operations, and environmental fines: Paid by P&I.
- Removal of the wreck if the ship is declared a Total Loss: Paid by P&I.