Protection and Indemnity insurance — P&I — covers the third-party liability exposures that hull and machinery policies leave unaddressed: crew injury and death, cargo liability, collision with fixed and floating objects, oil pollution, wreck removal, and a range of other third-party claims that arise from the operation of a vessel. Standard P&I club rules, however, contain a war exclusion that mirrors the hull market's approach: liabilities arising from war, warlike operations, or hostile acts are not covered under a club entry. P&I war risk insurance fills that gap. For vessels trading in or through recognized conflict zones, it is the third pillar of the war risk insurance stack — alongside hull war and cargo war — and the one most directly relevant to a shipowner's exposure to third-party claims arising from hostile-act incidents.
What P&I War Risk Insurance Covers
P&I war risk cover picks up the third-party liability exposures that arise specifically from war or warlike perils. The coverage is structured to shadow the underlying P&I club entry, responding only where the club would respond but for its war exclusion.
Principal covered liabilities include:
- Crew casualty arising from war peril — death, injury, or illness of seafarers caused by war, military attack, hostile act, piracy, or terrorist action. This is typically the largest potential exposure: under ILO Maritime Labour Convention standards and flag-state crew agreements, shipowners owe substantial compensation obligations to crew and their dependents for war-caused casualties
- Third-party property damage from hostile act — where a vessel under attack collides with or damages another vessel, a port installation, or fixed infrastructure as a proximate result of a hostile act
- Cargo liability arising from war peril — where cargo is lost or damaged aboard a vessel as a result of a war peril and the cargo owner pursues the shipowner under bill of lading liability rather than their own cargo insurer
- Wreck removal costs in war zones — a particularly complex exposure, as government condemnation of a wreck in a war zone may not be covered under the standard club pollution and removal provisions
- Stowaways, refugees, and persons rescued at sea — exposures that arise disproportionately in conflict-affected sea lanes where displaced people attempt to board commercial vessels
- General average contribution from cargo interests — where war risk gives rise to a general average declaration, P&I war risk may respond to the shipowner's liability to cargo interests who challenge a general average sacrifice
The Relationship Between P&I Club Cover and P&I War Risk
The structure is layered. The underlying P&I club entry covers third-party liabilities from normal marine operations. The club's war exclusion carves out hostile-act-related liabilities. A separate P&I war risk policy — written in the London surplus lines market or through specialist mutual associations such as the Hellenic Mutual War Risks Association — picks up where the club leaves off.
This layering creates a coordination risk: if there is any ambiguity about whether a liability arises from a war peril or an ordinary marine peril, both the club and the war risk insurer may contest primary coverage. Vessel operators should ensure their P&I war risk wording explicitly coordinates with their club rules and addresses the "war or marine?" gap through an endorsement or joint agreement.
The principal P&I clubs that make up the International Group of P&I Clubs collectively share claims above club retention through the Group's pooling and reinsurance programme, with war-risk treatment of pooled claims subject to specific terms and review cycles. Club members should confirm with their club whether P&I war risk is separately required or whether club coverage extends further than the printed war exclusion in their rules.
What P&I War Risk Insurance Excludes
- Fines and penalties imposed by governments acting under civil rather than hostile authority — these remain a standard club exclusion
- Crew casualties from non-war causes during transit through a war zone — a crew member who suffers a heart attack while the vessel is under way through the Red Sea is a club claim, not a war risk claim
- Pollution liability from war-risk incidents — the interaction between P&I war risk cover and the international pollution liability framework (CLC, Bunker Convention, US OPA 90) is complex; most P&I war risk policies contain carve-outs that reflect the limitations of private market capacity to absorb major pollution claims
- Nuclear, biological, and chemical perils — the same universal exclusion that applies across all war risk products
- Sanctions-implicated liabilities — the paramountcy of sanctions exclusions applies with full force in the P&I war risk context
How Premiums Are Set
P&I war risk premiums are set by underwriters against the vessel's P&I club entry limit (typically a portion of the club's overall limit) and the vessel's trading pattern. Unlike hull war risk, where the vessel's agreed hull value is the primary rating variable, P&I war risk is rated on a combination of:
- Vessel GRT and vessel type — larger vessels, tankers, and passenger vessels generate larger potential third-party liabilities
- Crew complement and nationality — the potential crew casualty liability drives a meaningful portion of the P&I war risk premium; vessels with larger crews, or crews from jurisdictions with high death-benefit compensation requirements, attract higher rates
- Trading area and frequency of war-zone transits — a vessel making infrequent transits through a JWC Listed Area will pay less than one stationed in a war-risk zone for extended periods
- Club entry limit — P&I war risk is typically rated as a percentage of the club entry deductible or as a standalone rate per GRT
P&I war risk premiums are substantially lower than hull war risk premiums in absolute dollar terms for most vessel types — the liability exposure, while real, is generally smaller than the agreed hull value — but they are non-trivial for large tanker operators with substantial crew liabilities and for operators regularly trading in contested waters.
Geographic Surcharges
As with hull war risk, P&I war risk underwriters apply additional premiums for voyages into JWC Listed Areas. The P&I war risk market generally tracks the same listed areas as hull war risk underwriters, and voyage notifications are typically required on the same schedule. Owners who have hull war risk cover through London-market syndicates and P&I war risk through a separate panel should coordinate notification processes to ensure both layers receive timely voyage declarations.
Who Buys P&I War Risk Insurance
Shipowners with Club Entries
Any shipowner entered in a P&I club who trades in areas covered by the club's war exclusion has an uninsured third-party liability exposure. The exposure is not theoretical: the Houthi attacks on commercial vessels in 2023–2024 generated crew injury claims, abandonment scenarios, and vessel loss situations where the interaction between club cover and war risk cover was immediately tested.
Vessel Operators Under Time Charter
Under a time charter, the registered owner typically maintains the P&I club entry. However, the time charterer may face exposure for liabilities arising from the trading instructions they issue — including instructions that take a vessel into a JWC Listed Area. Time charterers should confirm whether their contractual indemnity from the vessel owner provides adequate protection, or whether they need their own war-risk liability coverage.
Bareboat Charterers
Under a bareboat charter, the charterer assumes all operational liabilities including P&I. The bareboat charterer must enter the vessel with a P&I club independently and arrange P&I war risk cover in the same fashion as a registered owner. Many standard bareboat charter agreements require the charterer to maintain P&I club entry with a club that is a member of the International Group, and to provide evidence of P&I war risk coverage before entering any JWC Listed Area.
Tanker Operators in Contested Straits
Tanker operators trading in the Strait of Hormuz, the Bab-el-Mandeb, and the Strait of Malacca face concentrated P&I war risk exposure. A large crude carrier with a crew of 25–30 seafarers, trading regularly through the Hormuz Strait, has a meaningful potential crew casualty liability from a hostile-act incident — drone strike, limpet mine, seizure — that a standard P&I club entry will not cover. The seizure of the Stena Impero by Iranian Revolutionary Guard Corps forces in the Strait of Hormuz in July 2019, and the broader pattern of tanker interdictions in the Gulf since then, demonstrated that tanker operators in contested straits face real, not theoretical, P&I war risk claims.
Claims: How a P&I War Risk Claim Unfolds
Incident notification. As with all marine insurance claims, prompt notification to the P&I war risk insurer — in practice, through the club or broker who placed the war risk cover — is essential. Time charter operators should also notify the vessel owner and the club simultaneously.
Causation determination. The threshold question in every P&I war risk claim is whether the liability-generating event was a war peril or an ordinary marine peril. A crew member injured during a Houthi drone strike is a P&I war risk claim. A crew member injured in a fall during a storm in the same general area is a club claim. The forensic work required to establish this distinction requires early coordination between the club, the war risk insurer, and the owner's legal advisors.
Crew claims under MLC and ILO standards. Crew casualty claims under P&I war risk are adjudicated against the shipowner's obligations under the Maritime Labour Convention 2006 (MLC), the relevant seafarer's employment agreement, and the crew's collective bargaining agreement (CBA), which for many internationally-flagged vessels is negotiated by the International Transport Workers' Federation (ITF). War-cause crew death benefits under ITF-negotiated agreements are substantial on a per-seafarer basis, with disability and repatriation costs additional. For a large vessel with a multi-national crew, a war-risk mass-casualty event creates substantial P&I war risk claims exposure.
Third-party cargo liability. Where cargo owners pursue the shipowner under bill of lading liability following a war-risk cargo loss, the P&I war risk policy will defend and indemnify — subject to the standard club exclusion for cargo liability, which may apply a deductible or co-insurance arrangement. Coordination with the cargo war risk insurer (where one exists) reduces the shipowner's net exposure.
Recent Market Context
The Red Sea crisis generated a significant uptick in war-related P&I inquiries and claim activity across International Group clubs from late 2023 onward. Several clubs issued guidance to their members in early 2024 clarifying the interaction between their standard war exclusions and P&I war risk products, reflecting the volume of member inquiries after the Houthi attack campaign began.
The P&I war risk market — traditionally a smaller and more specialist segment than hull war risk — experienced capacity tightening in 2024. Several Lloyd's syndicates that had participated in P&I war risk as a secondary line reduced their participation as accumulated war risk exposure across hull, cargo, and P&I lines approached internal aggregation limits. This tightening was most pronounced for tanker operators regularly trading in the Red Sea and Persian Gulf.
Specialist mutual war risk associations serving the Greek and Scandinavian fleets continued to provide capacity for P&I war risk on those owners' tonnage. The Singapore market showed increased appetite for Southeast Asian flagged and operated vessels, offering competitive rates for vessels not transiting the Middle East theater.
For UK and US-based shipowners and operators, the dominant placement avenue remains the London surplus lines market, with most volume sitting in Lloyd's syndicates that write war risk across all three lines (hull, cargo, P&I).
Placing P&I War Risk Cover
P&I war risk is a specialty surplus-lines product in the United States, placed through wholesale intermediaries with direct Lloyd's and specialist war risk market access.
A P&I war risk submission requires the vessel's club entry certificate or schedule (to confirm the underlying P&I coverage structure), vessel GRT and type, trading area declarations, crew complement and nationalities, and details of any prior P&I war risk claims. For vessels requiring immediate AWRP-equivalent P&I war risk for an imminent voyage, urgent placements can typically be arranged through established market channels within 24–48 hours.
To request a P&I war risk quote or to discuss how P&I war risk coordinates with your existing club entry, use the form below.