India has started offering P&I insurance through a new government backed scheme, the BMIP, with first policies issued in July.

The first policies went to Shipping Corporation of India, covering a tug and two barges.

It marks the moment the pool, known as BMIP, moved from paper to practice on one of its core promises.

To understand why this matters, it helps to know what P&I insurance actually covers. If a ship gets damaged, that is normally handled by separate hull insurance.

P&I insurance instead covers the liabilities a shipowner faces towards others, things like injury claims from crew members, damage to cargo, pollution caused by an accident, or the cost of removing a wrecked vessel.

Until now, Indian shipowners largely depended on international P&I clubs for this kind of cover.

The government has flagged this as a risk, especially during periods of geopolitical tension when access to global insurance markets can get disrupted or costlier.

The BMIP was set up to change that. The Union Cabinet cleared the pool in April this year, backed by a sovereign guarantee of ₹12,980 crore, and the Department of Financial Services launched it in May.

Its total cover capacity stands at $1.5 billion, spanning hull and machinery, cargo, P&I and war risk insurance for Indian linked vessels.

In its first few months, the pool focused mainly on war risk cover. By the end of July, it had issued 1,608 policies for cargo and hull war risks, and the government says war risk premiums have already dropped 35 to 40% from their peak during the recent West Asia conflict.

The P&I piece is newer and comes with its own hurdle. For these policies to be genuinely useful, ports and authorities around the world need to recognise them, and that acceptance is still a work in progress.

Industry executives expect the pool to extend full P&I cover to ocean going vessels by 2027.

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