Sanctions Evasion Reference

Protection and indemnity club

A mutual association of shipowners that provides third-party liability cover, including for pollution, which ports and states generally require before a vessel may trade.

also known as

P&I club, P and I

reviewed

2026-08-20

P&I cover is the insurance that matters most in shipping, because it answers the question of who pays for a spill. The established clubs are mutuals with published rules and members, and their cover can be confirmed.

A vessel presenting cover from an entity that cannot be identified, or whose capacity to meet a claim cannot be established, is the maritime equivalent of an unverifiable guarantee, and the 2020 advisory treats it as an indicator in its own right.

Where this term is used

  • What is flag hopping? — Re-registering a ship repeatedly between flag states, often to registries with limited oversight, so that its regulatory history is broken and its documented identity keeps changing.
  • What is opaque marine insurance? — Presenting protection and indemnity or hull cover from a provider that cannot be identified, or whose ability to meet a claim cannot be established, in order to satisfy a requirement to be insured.
  • What is price cap attestation fraud? — Providing a false or unsupported statement that oil was bought at or below a capped price, so that shipping, insurance and financing services remain available for a cargo that does not qualify.

Related terms

  • Flag state — The country in which a ship is registered, whose law governs the vessel and which is responsible for inspecting and certifying it.
  • Price cap — A measure permitting specified services for seaborne oil only where the cargo was bought at or below a stated price, enforced through the service providers rather than at the border.
  • Attestation — A signed statement by a party in a transaction confirming a fact that the recipient cannot itself observe, relied on as the basis for providing a service.

Sources

  1. Guidance to Address Illicit Shipping and Sanctions Evasion Practices. U.S. Department of State, U.S. Department of the Treasury and U.S. Coast Guard, 2020. Global maritime advisory, 14 May 2020.
  2. Sanctions Advisory for the Maritime Oil Industry and Related Sectors. U.S. Department of the Treasury, Office of Foreign Assets Control, 2023. Price cap advisory, 12 October 2023.

All glossary terms