The Hindu Business Line : Insurance against shipwrecks: Indian cos ask for more time

Insurance problems
Many ships are insured only with international insurance companies
P&I club would be expensive for smaller ships
New rules make chartering foreign ships more difficult

Mumbai , July 17

Indian shipping companies have asked the Government to keep in abeyance for six months the new rules regarding insurance cover for ships entering Indian ports.

Under the new rules, no ship can call at an Indian port without an insurance cover from a government-approved P&I Club or an insurance company for meeting the expenses of removal of wreckage in the event of a mishap and for paying compensation for damages caused by an oil spill .

Mumbai and Jawaharlal Nehru Ports have decided to enforce the new rules from next month.

A couple of smaller ports have already enforced the new rule. Mumbai port has issued a circular to shipping lines that ships without the required insurance cover will not be allowed entry into the port from August 1, 2006.

Owners' woes

The objective of the new rule is to ensure that ship owners pay for the damages caused by their ships to the port.

According to ship owners, several Indian ships — particularly smaller ones — and offshore supply vessels are not attached with P&I clubs approved by the Government. They are insured only with international insurance companies. These vessels will not be able to call at Mumbai Port from August 1, unless they join one of the P&I clubs, said a shipping company official.

"All our vessels are insured but not with the Government-approved P&I Clubs.

For small ships, it would be expensive to go in for P&I club membership. So, we go in for fixed premium insurance, which offers the same covers," said the official.

Less protection

Government-approved list includes only 13 large protection and indemnity clubs and Indian insurance companies.

But as of now Indian insurance companies do not offer cover against oil pollution and wreck removal.

According to ship owners, the new rules make chartering foreign ships more difficult. Parties chartering international ships will have to ensure that they are insured by a Government-approved P&I club.

Indian National Ship Owners Association is taking up the issue with the Union Shipping Ministry.

More Stories on : General Insurance | Shipping

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