Explaining a P&I Club to Your Client

In some instances, Australian based insurers are unable to offer the coverage that a Shipowner requires to adequately protect themselves from the perils associated in operating their business. This is acknowledged by the Australian Government and has created exemptions to allow Australian businesses to have access to the necessary insurance protection when it can only be sourced from overseas based Insurers.

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Whilst allowing this practice to occur the Australian Government Legislation only allows for usage of these Direct Offshore Foreign Insurers in very limited circumstances. They have broken down these circumstances into three categories being;

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• High-value insured

• Atypical risk

• Customised

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You can view the exemption categories in more detail here  Regulation of Direct Offshore Foreign Insurers - Limited Exemption Arrangements | Treasury Ministers however, in respect of Shipowners Protection and Indemnity it is acknowledged that this insurance cannot be placed on a stand-alone basis with current Australian authorised insurers.

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We point out that it is the client’s and the insurance intermediary’s responsibility to determine whether the client’s activities and/or requirements meet the criteria to seek use of a Direct Foreign Insurer.

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Once the decision has been made by the customer and Insurance Broker to proceed with sourcing a quotation, Quay Marine obtain will request terms from a Direct Offshore Foreign Insurer and present them to the Insurance Broker. If accepted and the decision is made to proceed with the cover, the client will be required to complete an Unauthorised Foreign Insurer Form which Quay Marine will retain on file in accordance with the required legislation.