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Iran’s Kish P&I Club and Qeshm International Trust Alliance (QITA P&I Club) have been granted permission by India till February 2020 to provide cover to Iran tankers bringing crude to the country with a liability limit equivalent to the one extended by a London-based global insurance group. This will help in continuing oil supplies from the sanctions-hit Persian Gulf nation.
Kish P&I Club and QITA P&I Club — backed by a sovereign guarantee from the government of Iran — will provide $1 billion limit on individual claims, according to the Shipping Ministry.
A government panel approved the application of the two Iranian P&I Clubs after assessing their capability on 16 counts to extend the full $1-billion cover — the limit of any third party claim, a Shipping Ministry official said.
During the earlier round of sanctions, India approved the two Iranian ship underwriters to provide insurance for container, tanker and bulk vessels calling at Indian ports. Such approvals were initially given on a quarterly basis which was later granted for a six-month period and subsequently for a year. The latest extension will run through February 20, 2020, the official said.
India has made it mandatory for foreign ships entering the country’s ports to hold a valid third-party liability cover against maritime claims such as oil pollution, wreck removal and damage to port property.
Such third-party liability risks have to be insured with the London-based International Group of Protection and Indemnity Clubs (IG Clubs) or such other insurance company authorised by the government, according to the Merchant Shipping (Regulation of Entry of Ships into Ports, Anchorages and Offshore Facilities) Rules 2012.
Third-party risks
Globally, such third-party risks are insured with the IG Clubs, a 13-member group based in London that provides liability cover for about 90 per cent of the world’s ocean-going ships, placing a $1-billion limit on individual claims.
The new sanctions imposed by the United States will take effect from 4 November after which the IG Clubs will halt third- party liability cover to ships hauling Iranian crude oil.
“Whatever quantity was contracted with Iran before sanctions, that was on free-on-board (FOB) basis. Now, with the sanctions, that would be converted into cost, insurance and freight (CIF) imports. For that, permission has been granted by the Shipping Ministry,” an shipping ministry official said.
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