Govt eyes insurance facility for shipping cos

NEW DELHI: Amid the ongoing conflict in West Asia and disruptions in the Strait of Hormuz that have left several ships stranded, govt is once again looking at the creation of a Protection and Indemnity (P&I) club for shipping companies and vessels, which will reduce reliance on foreign insurers, bolster maritime insurance capacity, and avoid sanctions.

The plan was discussed a few years ago but govt did not proceed with it as tension in West Asia subsided.

Responding to a question on Tuesday, Rajesh Kumar Sinha, special secretary in the shipping ministry, said talks with the department of financial services (DFS) were underway. "Two-three days back also, we took up the subject with the DFS. We have also commissioned a study on this, which is underway. The report based on the study should be with us very soon. We will move on the basis of the report. It will be an important step for us," he said.

Global shipping lines and businesses are grappling with heavy war surcharge imposed by insurane companies due to high risk in the region.

P&I clubs are mutual insurance associations that provide insurance to shipowners and operators from third-party liabilities by covering risks such as oil spills, cargo damage, pollution, collisions, and crew injury. In 2023, FM Nirmala Sitharaman had spoken about the need for a domestic P&I mechanism to reduce India's dependence on overseas marine liability insurers.

At present, over 90% of global ocean-going ships are insured through International Group of P&I Clubs, the 13-member group that provides liability cover to around 60,000 vessels.

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