North of England P&I Association

The North of England Protecting and Indemnity Association, generally known as North P&I Club, is a leading marine mutual liability insurer. It provides protecting and indemnity (P&I), freight demurrage and defence (FD&D), war risks and ancillary insurance cover and loss prevention services to around 131 million GT of owned tonnage and 54 million GT of chartered tonnage, with around 5000 ships worldwide. Through its guaranteed subsidiary Sunderland Marine, North is also a leading insurer of fishing vessels, small craft and aquaculture risks.

Founded in 1860, North is based in Newcastle-upon-Tyne, UK with regional offices in Hong Kong, Piraeus, Singapore and Tokyo and Sunderland Marine offices worldwide. It employs almost 400 people and has an ‘A' financial strength rating with stable outlook from Standard & Poor's.

North is one of the top three members of the International Group of P&I Clubs, with 11.5% of the group’s owned tonnage.[1] The 13 group clubs provide liability cover for approximately 90% of the world’s ocean-going tonnage and, as a member of the group, North protects and promotes the interests of the international shipping industry.

History

The history of North and P&I generally is centred on Newcastle-upon-Tyne in north-east England, a former Roman settlement which emerged as one of the world's major shipping and shipbuilding centres in the sixteenth century.

In the eighteenth century, many north-east shipowners came together to form small mutual insurance clubs. They all began their policies on 20 February each year, which is when sailing ships were traditionally taken from their winter lay-ups and made ready for trade with the ice-free ports in the Baltic. All 13 clubs in the International Group of P&I Clubs still collectively renew their member and reinsurance policies on this date.

North’s roots go back to the North of England Iron Steam Ship Protecting Association in Newcastle upon Tyne, which emerged from a series of amalgamations in 1860.[2] It was one of the world’s first mutuals providing personal injury and collision liability cover for steamships. In 1885 the club added cargo indemnity cover by merging with the local Steam Ship Owners’ Mutual and, by 1914, had become the leading P&I club in Britain.

However, North lost ground after World War II, mirroring the decline of the British merchant navy. A gradual revival began in the 1960s with the appointment of managers Alec Murray and Len Harrison, who made North of a member of the influential London Group of protecting and indemnity (P&I) clubs in 1969, which later became the International Group. This paved the way for major international growth from the mid-1980s onwards, leading to North opening branch offices in Hong Kong in 1995, Greece in 2000, Singapore in 2007 and Japan in 2012.

The tradition of two managing directors, which first started in 1885, continued with the appointment of the joint management team of Peter Crichton and Rodney Eccleston in 1988 and by their successors Alan Wilson and Paul Jennings in 2009.

Corporate development

Much of North's growth since the 1960s has been due to mergers and acquisitions of smaller clubs. In 1967 North absorbed the neighbouring Neptune P&I club, bringing a number of Irish and Yugoslav vessels. On 20 February 1998 it merged with the Newcastle club, adding some 5 million GT of shipping and 30 staff. Two years later North absorbed the business of the Liverpool and London club, adding another 5 million GT.

In 2000 it also established North Insurance Management Limited (NIML) as a wholly owned management subsidiary. On 28 February 2014 North acquired Sunderland Marine Mutual Insurance Company Limited,[3] a leading insurer of fishing vessels, small craft and aquaculture risks, with over 29,000 policies in 50 countries and over 100 staff. Sunderland Marine now operates as a guaranteed subsidiary of North, with regional offices in Australia, Canada, the Netherlands, New Zealand, South Africa and North America (where it trades as Harlock Murray). It shares North's ‘A' financial strength rating and stable outlook from Standard & Poor's.

Products and services

P&I

North’s primary business is providing P&I cover to shipowners and charterers worldwide. The insurance is comprehensive and includes cover for third party legal liabilities in respect of:

  • People claims
  • Collisions
  • Damage to fixed and floating objects
  • Pollution
  • Wreck removal
  • Cargo claims
  • Fines or other penalties.

The club’s staff includes a significant number of former seafarers and lawyers. The claims team can also provide members with assistance, information and advice in response to a wide range of general enquiries, from the application of international sanctions to the use of armed guards on board vessels through to questions concerning the carriage of particular types of cargo.

For many years North has been operating comprehensive pre-employment medical schemes in the Philippines and Ukraine, which are proven to result in better care for the seafarer, mitigate claims and reduce costs. It has also developed a ‘First Call’ service for crew landed and requiring treatment in the US, and a post-repatriation medical scheme specifically for Filipino crewmembers.

FD&D

Freight, demurrage and defence insurance, often referred to as ‘FD&D’ or defence cover, is a discretionary legal costs insurance that protects members’ interests and assets by supporting them to recover any proper claims for uninsured losses and/or to defend and resist any actions improperly brought against them, that fall within the remit of the club's rules.

North's FD&D team comprises a large team of qualified lawyers, ranging from English solicitors to overseas-qualified attorneys and advocates. The team is able to deal with the majority of legal work surrounding the defence and prosecution of cases in-house.

The scope of cover is very wide, covering legal costs and expenses properly incurred in all types of dispute falling outside the scope of P&I, hull and machinery, loss of hire and time charterers’ liability for damage to hull insurances. Most of the disputes referred to the FD&D team are charterparty disputes, but it also handles a large number of queries and claims concerning:

  • Bills of lading
  • Guarantees and letters of indemnity
  • Sale and purchase contracts
  • Newbuilding contracts
  • Bunker (and other) suppliers
  • Stevedores
  • Underwriters
  • Crew
  • Other matters connected to contracts of affreightment and carriage.

War risks

North's war risks class provides cover for losses caused by war or terrorism in respect of physical loss or damage to the entered ship, P&I liabilities and losses incurred as a consequence of an entered ship being blocked or trapped in an area of conflict.

Ancillary cover

North provides bespoke additional cover for owners, charterers and non-vessel-owning common carriers for operations which go outside standard P&I risks or which involve specialised marine operations.

  • Cargo risks - ship owner's liabilities (SOL), contractual deviations, ad valorem bills of lading, mis-delivery under bills of lading, rare and valuable cargo, non-poolable paperless trading, cargo owner's liabilities, and extended through-transport cover for cargo.
  • People risks - crew familiarization and newbuilding supervisors.
  • Contractual liabilities - excess contractual cover and North America clean-up.
  • Commercial risks - maritime lien for charterers' debts, maritime lien for second-hand ships, ship seizure, charterer's loss of use, balance sheet protection in fluctuating chartering markets, and balance sheet protection for owners with newbuildings on order.
  • Specialist risks - offshore oil and gas exploration and productions operations, specialist operations, dredging, pile-driving, cable-laying, non-poolable towage, divers, salvage, and heavy-lift operations.

Loss prevention

North's loss prevention service provides Members with information upon which they can base their own loss prevention and safety programmes. It includes an extensive range of practical loss prevention guides, briefings and other publications produced specifically for members, together with topical information, training and other loss prevention tools.

Co-authored with leading industry experts, the club's popular series of 14 loss prevention guides are distributed widely throughout the shipping industry.

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References
  1. Mulrenan, J (2015) UK and North tie for second spot on P&I tonnage league, Tradewinds, 27 February 2015, http://www.tradewindsnews.com/weekly/355044/uk-and-north-tie-for-second-spot-in-pandi-tonnage-league
  2. Watson, N (2009) Celebrating 150 years of the North of England Protecting and Indemnity Association, North of England P&I Association, UK, http://www.nepia.com/media/136569/150Book.pdf
  3. Mulrenan J (2014) Northern clubs merge, Tradewinds, 3 March 2014, http://www.tradewindsnews.com/finance/333424/northern-clubs-merge
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