Protection & Indemnity (P&I) Insurance
Prelims:
Indian Economy
Mains:
GS Paper III-Indian Economy,
Infrastructure
Current relevance:
The
Department of Financial Services (DFS), Ministry of Finance, launched India's
first sovereign-backed Protection & Indemnity (P&I) insurance product under
the Bharat Maritime Insurance Pool (BMIP) to strengthen India's maritime
insurance ecosystem.
Highlights:
1.
The Department
of Financial Services launched India's first sovereign-backed Protection
& Indemnity (P&I) Insurance product under the Bharat Maritime
Insurance Pool (BMIP), designed by The New India Assurance Company
Limited.
2. About Protection & Indemnity (P&I)
Insurance:
i.
Protection
& Indemnity (P&I) Insurance is
a specialised form of marine liability insurance that provides financial
protection to shipowners and operators against third-part liabilities
arising from the operation of ships.
ii. It typically covers liabilities related to crew, cargo, pollution, wreck removal, collisions, and damage to third-party property that are generally not covered under standard
hull insurance.
iii.
It provides
financial protection against legal liabilities and compensation arising from maritime
accidents and operational risks, while supporting financial
security, international maritime trade, and effective risk management in
the shipping sector.
3. Bharat Maritime Insurance Pool (BMIP):
i.
It is a sovereign-backed
maritime insurance mechanism, operationalised by the Department of
Financial Services (DFS) on 12 May 2026, to ensure uninterrupted war risk
insurance coverage for India's maritime sector during periods of heightened
geopolitical risk.
ii.
The
introduction of BMIP has reduced war risk premium rates by approximately
35–40% compared to the levels observed during the peak of the West Asia
conflict.
iii.
The addition
of P&I coverage further strengthens India's maritime risk management
framework and improves the resilience of the maritime insurance ecosystem.
4. Significance:
The initiative advances the vision of
Aatmanirbhar Bharat by strengthening domestic insurance capabilities,
reducing dependence on foreign insurance markets, and retaining greater
value from India's maritime trade within the domestic economy.
Source: PIB - https://www.pib.gov.in/PressReleasePage.aspx?PRID=2291922®=48&lang=1