Govt Approves Creation Of Bharat Maritime Insurance Pool With Sovereign Guarantee Of Rs 12,980 Cr

New Delhi: The Cabinet on Saturday approved the creation of Bharat Maritime Insurance Pool (BMI pool), with a sovereign guarantee of Rs 12,980 crore to facilitate continuous maritime insurance coverage.

The information was shared by Information and Broadcasting Minister Ashwini Vaishnaw while briefing about decisions taken at the Cabinet meeting chaired by Prime Minister Narendra Modi.

The pool ensures that Indian trade continues to have access to affordable insurance for vessels carrying cargo from any international origin to Indian ports and vice versa, even when transiting volatile maritime corridors.

The government has approved the formation of 'Bharat Maritime Insurance Pool' for Indian flagged or controlled vessels or vessels destined to or starting from India, backed by a sovereign guarantee.

The pool would cover all maritime risks like Hull and Machinery, Cargo, P&I and War risk. The policies will be issued by insurers that are Pool members, using the combined underwriting capacity of the pool, which would be around Rs 950 crore.

The pool will further help to manage liability insurance locally, tailored to Indian Shipping conditions and regulatory requirements, develop specialised Marine underwriting, claims management and legal expertise within the country, said the official statement.

Moreover, a governing body constituted for this pool would oversee the formation and functioning of the pool. According to the government, with increased global volatility and geopolitical instability, maritime trade has been impacted with increased risk of losses for cargo and vessels, resulting in increased insurance costs and uncertainty in the continuous availability of insurance.

There is high dependence of Indian vessels on the International Group of Protection and Indemnity (IGP&I) Club for P&I insurance covering third-party liabilities like Oil pollution liability, Wreck removal, Cargo damage, Crew injury and repatriation, Collision liabilities and so on.

There was a need for a domestic maritime risk coverage pool to maintain sovereignty and continuity of trade in the face of withdrawal of coverage due to sanctions or due to geopolitical tensions, said the government.

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