Charterers

Two of the factors which contributed to the formation of shipowners’ P & I Clubs were the additional risks which shipowners had to assume following the almost universal acceptance of the Hague Rules, and the reluctance of underwriters to accept more than three-quarters of an owner’s liability for damage done to another ship in a collision. Accordingly owners associated together on a mutual basis, forming the directing boards of the Clubs, whose managers are mostly professional legal partnerships with legal experience. Subscriptions (or ‘calls’) are made annually based on the tonnage entered and on the record of the party involved. A high claims record should mean that the calls will be levied at a higher rate than for an entered owner with a low claims record. If forecasted claims are higher than expected, supplementary calls will need to be levied to enable the Club to pay its way. ‘Protection’ would deal with matters such as: – one quarter of owner’s collision liability; personal injury; crew liabilities; damage to piers; and removal of wrecks. ‘Indemnity’ would involve: – loss of or damage to cargo; a ship’s proportion of General Average; and customs’ fines. A third section of cover – ‘Freight, Demurrage and Defence’ – would be concerned with the enforcement of legal proceedings for collection of freight and hire; conduct of actions and arbitrations, and general legal advice to members. Some Shipowners’ Clubs seek to attract Charterers and Operators as members whilst specialised Charterers P & I Clubs exist to provide a range of services for charterers such as cover for costs and expenses incurred in asserting or defending court actions or arbitrations (i.e. Defence cover) and indemnity for liabilities towards shipowners, disponent owners and cargo owners under voyage and time charterparties (i.e. Liability cover). The third Club type – Professional Indemnity Insurance – exists for the benefit of Shipbrokers and Agents, providing services for members acting in the exercise of their profession as agents in chartering, sale and purchase of ships, port agency, freight forwarding, liner agency, travel agency, airbroking, bunker broking and ship management. This cover is available from one specialist club, based in London – the International Transport Intermediaries Club (ITIC) – brought about by the merger of the Transport Intermediaries Mutual (TIM) and Chartered and International Ship Brokers and Agents Club (CISBA).