What is P&I Cover in Yacht Insurance?

What Is P&I Cover in Yacht Insurance?

Protection and indemnity (P&I) cover in yacht insurance protects you from claims *other people* might make against you—like if your boat causes damage, injury, or environmental harm. It’s different from hull insurance (which covers your boat itself) and focuses on third-party liabilities you could face while operating your yacht.

Covering Crew, Passengers, and Accidents You Cause

P&I cover includes *crew liability* and *passenger liability*. For example, if a crew member falls overboard and gets hurt, or a guest slips on a wet deck and breaks a wrist, P&I pays for their medical bills and any legal costs. It also covers collisions: if your yacht hits a dock, another boat, or a submerged rock, P&I pays for the damage you caused. This is separate from hull insurance, which would repair *your* boat.

Pollution Liability: Cleaning Up Messes You Don’t Want to Make

If your boat spills fuel, oil, or waste into the water—whether it’s a small leak or a major accident—P&I covers cleanup costs and fines. For instance, if a storm damages your fuel tank and 500 gallons leak into a marine sanctuary, P&I pays for the environmental cleanup and any penalties from regulators. This is critical because pollution claims can cost hundreds of thousands of dollars.

Salvage and Wreck Removal: When Your Boat Needs a Lifeline

If your yacht runs aground or capsizes, P&I covers the cost to *salvage* it (get it back afloat) and remove the wreck if it’s beyond repair. Imagine your boat hits a reef and sinks; P&I will pay for divers, tugboats, and debris removal to prevent it from damaging the environment or blocking shipping lanes. This is different from *hull & machinery* cover, which might pay to repair your boat but not the external costs of recovery.

• Hitting a submerged log and damaging a nearby fishing boat’s propeller.
• A guest getting food poisoning from improperly stored food and suing for medical expenses.
• Spilling diesel into a protected cove during a refueling accident.
• Colliding with a cruise ship in a busy harbor and covering their repair costs.
• Removing your wrecked yacht from a coral reef after a storm.

Always review your policy’s P&I section to confirm it includes crew liability, pollution coverage, and salvage costs—these are often excluded or limited in standard hull policies. If you regularly cruise in busy or environmentally sensitive areas, P&I is non-negotiable protection.