IFFCO Tokio General Insurance (ITGI) is planning to establish a foothold in the shipping industry. The company is exploring the possibility of providing Protection and Indemnity (P&I) policy for vessels calling at Indian ports for the duration of their birth at the port, says S. Narayanan, Executive Vice President, ITGI. "We will readily give cover to all vessels operating exclusively within Indian waters. At the current stage we do not have any plans to insure ocean going large vessels for P&I coverage."
In November 2005, IFFCO Tokio had introduced the Sagar Bandhu policy which provides P&I coverage for barges in the country. The policy covers hull and machinery, wreck removal and 4/4th collision liability as per the Institute Port Risk Clause 1987. The policy also covers P&I for liabilities like damage to other vessels, loss of damage to third party, wreck removal, to persons other than crew, pollution risks and cargo liability (optional). Despite the fact that P&I has high risk and is specialised, ITGI has entered the area to gain experience.
The company has now covered more than 80 vessels under the policy, mainly from Goa port. The maximum liability offered under this policy is Rs 5 crore. "Sagar Bandhu policy has been received very well in the market. The company has covered more than 80 vessels under the policy and Goa port has been the main focus for the policy. We are expecting to insure at least 40 per cent of the barges in India," Narayanan explains.
The premium rates that ITGI offers are much more competitive than P&I clubs. These clubs essentially cater to big vessels, but Sagar Bandhu policy is extremely useful for small vessel operators for which P&I clubs ordinarily do not provide any cover.
Besides P&I clubs ITGI is the only insurance company in India which is authorised to offer this cover. As all P&I clubs are based outside this country, the premium for taking cover from these clubs also goes outside India.
P&I insurance covers a variety of projects ranging from hydro power projects, steel and aluminium plants, automobile plants, chemical and petrochemical plants, fertiliser plants, infrastructure projects (roads, airports, buildings etc.) and engineering manufacturing plants. The insurance cover commences from the date of arrival of first consignment at the site. It covers the project stages including erection, construction, commissioning and testing.