Protection and Indemnity Insurance or PI insurance is used by ship owners as insurance to their fleet or boat for commercial reason. It is known as a type of insurance that provides the most coverage. Even though the coverage could amount to millions, release of funds is usually fast.

But that does not mean PI Insurance could be provided to any ship owner whenever disaster strikes. There are certain exemptions that ship owners have to be aware of:

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1. Confusion with other insurance policies – This is a common exception in PI Insurance. Coverage from PI insurance may not happen because the provider assumed that the certain liability will be handled by the other insurance providers. There are other types of insurance that a ship owner could have such as hull insurance or war risks insurance and PI will not provide coverage if the conditions suggests that another insurance provider will provide financial assistance.

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2. Understanding of terms and conditions – Although PI Insurance offers broad coverage, certain terms and conditions have to be followed by the policy holder. There are legal requirements that the ship owner should do before PI insurance will be granted. Aside from the requirements need for PI insurance, the insurance provider will also require ship owners to comply with every state requirement for shipping.

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3. Business Misconduct – There are situations wherein ship owners manipulate the situation just to have insurance claims. Insurance providers could easily spot this as this would often arise whenever there’s a problem with the cargo. Ship owners have to be aware that every detail is taken by insurance investigators and would rightfully deny claims if certain actions were not done to prevent this.

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4. Outright Transgression – This is even worst with business misconduct because it does not only involve cargo but with the lives of the people. There are times wherein ship owners consciously avoid certain actions to place the boat in harm’s way. If something does happen, the policy holder might be eligible for millions in insurance claims. However, if the insurance provider will determine that the transgression happens because the ship owner purposely disregarded some safety measures, the policy holder will have to shoulder the burden of providing compensation to those who suffered.

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5. Criminal Liability – There are times that the insurance provider will deny claims because the ship owner did not comply with certain laws and provisions of the state. Although PI Insurance is a little bit lax on its policies, it will still go with the state law where the accident happens. If the state determines that the ship owner (policy holder) is at fault, the insurance provider will not release any coverage to the policy holder.

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These are the common conditions that the policy holder will have to comply. Protection and Indemnity Insurance will always accommodate their policy holders however; they will never tolerate anyone who will manipulate the system or those who has transgressed state laws just to get millions in insurance claims. Be sure to contact your insurance broker for clear understanding of terms, conditions and coverage.