(insurance) Acronym for Protection and Indemnity. A mutual insurance association of shipowners and charterers operating on a non-profit basis and designed to pool resources to meet losses suffered by individual members. Each member pays a “mutual premium” based on the tonnage of the vessels they have entered into the club to cover claims, reinsurance, and administrative expenses for a one-year period. If that year’s claims are higher than expected, members pay an “additional call.” If claims are less than expected, members may receive a return payment. P&I clubs were first formed in England in the mid-1800s as a response to the near monopoly of two hull insurance companies and Lloyd’s of London, who were forcing high premiums on ship owners.