Monday, June 11th, 2012

How the P&I limit applies in a bodily injury casualty

There is a common misconception among buyers of commercial marine insurance policies that the P&I limit, say it’s $250,000, is “per person” or “per crewman”.

This is true if only one person sustains an insurable injury, such as a crewman getting hit in the eye by a customer’s sinker while sport fishing. $250,000 is then available for his medical costs and his maintenance.

However if something occurs where more than one person needs medical costs paid or is entitled to maintenance, such as when 2 crewmen get hurt in the same incident, the $250,000 limit, though available to both of them, is the most the contract of insurance is liable to pay for both their total costs. If it were 40 passengers that all had to go for medical attention because of a fire, the $250,000 has to take care of all 40 people.

Passenger carrying vessels often have an additional coverage for passengers known as ‘Medical Payments’ which typically should have no deductible, and are available for all services rendered to an injured passenger. Those payments are not legally considered an admission of liability on the part of the insured.