State-run New India Assurance has launched a new insurance cover, namely, protection and indemnity (P&I) cover for Indian registered vessels, starting with vessels plying local routes. This is reportedly India's first P&I cover by a domestic insurer.
New India Assurance has offered the maiden cover to two river sea vessels run by Mumbai-based SVS Marine after the P&I product was approved by the IRDAI, reports The Hindhu Business Line.
The New India Assurance cover has a limit of $5 million per vessel. “With reinsurance support, we can stretch it by another $10 million,” said Mr Sanjiv Singh, a deputy general manager at New India Assurance. The plan is to offer cover for coastal ships for a few years before moving onto ocean-going vessels.
That is small compared to the P&I cover issued by London-based International Group of P&I Clubs, a 13-member group which insures close to 90% of the world’s merchant ships, placing a $1-billion limit on individual claims that involve pollution damage and wreck removal.
The withdrawal of the US from the international nuclear accord with Iran and the reinstatement of sanctions against the Persian Gulf nation have plunged countries such as India into uncertainty over oil purchases from Iran, India’s third largest supplier, particularly P&I cover for ships hauling Iranian crude.
“Probably we can offer the P&I cover to ships transporting Iranian crude. But, not right now. We will have to file a separate product and receive the approval of the IRDAI for that,” Mr Singh said.