The article discusses Indian ship owners’ concerns about the proposed increase in third-party liability cover by the state-run New India Assurance Company Ltd. The company plans to raise the cover from $15 million to $25 million, in partnership with Norwegian marine insurer Hydor AS. The move is aimed at providing a more comprehensive coverage to Indian ships plying on domestic routes.
Currently, Indian ship owners take a no-objection certificate (NOC) from the Insurance Regulatory and Development Authority of India (IRDAI) to buy third-party risk cover from overseas, as the local insurance industry does not have the capacity or capability to provide such cover.
The Indian Coastal Shipowners Association (ICCSA) has concerns that the new cover may become mandatory, restricting their ability to buy it from abroad. They are pushing for a competitive market, where multiple insurance providers can offer their services.
The article also highlights the need for a full-fledged India-owned and India-based Protection and Indemnity (P&I) entity, as emphasized by Finance Minister Nirmala Sitharaman in October 2023. Such an entity would reduce India’s vulnerability to international sanctions and pressures, provide greater strategic flexibility in shipping operations, and offer protection of liabilities to ships operating in coastal waters and inland waterways.
While the move is intended to benefit Indian ship owners, some are concerned about the proposal’s limitations, including the role of Hydor AS in providing services and the lack of a comprehensive product package from New India Assurance. The article concludes by emphasizing the need for a competitive market and a full-fledged India-owned P&I entity to benefit the Indian shipping industry.