What is a protection and indemnity agreement?

A Protection and Indemnity Agreement (PIA) is a form of insurance against third-party liability where an association of shipowners in general band together for the specific purpose of providing insurance cover on a mutual basis against liabilities incidental to ship-owning that the members incur against third parties. In Pandiman Philippines v. Marine Manning Management, the Supreme Court considered a PIA as an insurance contract. (G.R. No. 143313)

SUPREME COURT: "In this protection and indemnity agreement, which is actually an insurance contract, the provisions of the Insurance Code (P.D. 1460, as amended) is the governing law. In the subject insurance contract, the P&I Club (OMMIAL) is the insurer, the shipowner (Sun Richie Five Bulkers S.A.) is the insured, and herein respondent Rosita Singhid as widow and heir of a crew on board the insured vessel like Benito, is a beneficiary."

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