The Department of Financial Services has launched India’s first sovereign-backed Protection & Indemnity insurance product, designed by New India Assurance, under the Bharat Maritime Insurance Pool. The product covers shipping companies against third-party liabilities up to USD 1.5 billion, with a sovereign guarantee of ₹12,980 crores and follows the pool’s earlier success in stabilising war-risk insurance rates for Indian vessels.
The government has added a new layer of cover to India’s maritime insurance framework. On 30 July 2026, the Department of Financial Services (DFS), Ministry of Finance, launched the country’s first sovereign-backed Protection & Indemnity (P&I) insurance product under the Bharat Maritime Insurance Pool (BMIP), handing over the first policy to Shipping Corporation of India Limited.
What Actually Got Launched
The product was designed by New India Assurance Company, and DFS Secretary Sanjay Lohiya handed over the first policy document at an event in New Delhi. According to the official press release from the Press Information Bureau, the cover includes:
- Crew and cargo liability
- Pollution liability
- Wreck removal
- A 24×7 port correspondent network
- An indemnity limit of up to USD 1.5 billion, backed by the pool’s combined capacity
This is what’s known as P&I insurance in shipping: cover for a ship owner’s liability to third parties, as distinct from hull insurance, which covers damage to the vessel itself.
Why “Sovereign-Backed” Matters Here
BMIP itself isn’t brand new. DFS operationalised the pool back on 12 May 2026, backed by a sovereign guarantee, initially to keep war-risk insurance available to Indian shipping stakeholders without interruption.
That’s mattered more than usual lately. Since the pool started operating, war risk premiums have dropped by roughly 35 to 40% compared with rates seen at the height of the West Asia conflict, and as of 29 July 2026, 1,608 policies covering cargo and hull war risks had been issued through it.
Extending BMIP to include P&I cover is a deliberate next step, not a separate scheme. It’s meant to build India’s own underwriting capacity for a type of cover Indian shipping companies have traditionally sourced from international P&I clubs.
Who This Actually Serves
This isn’t a retail insurance product, and it isn’t meant to be. The people who benefit directly are Indian shipping companies and vessel operators, starting with Shipping Corporation of India as the first policyholder, who now have a domestic, sovereign-backed alternative for a type of liability cover that’s historically depended on foreign markets.
The relevance is more about what it signals than anything to act on: it’s a step toward India building specialised insurance capacity at home, in line with the government’s broader Atmanirbhar Bharat push, and a sign that the country’s maritime insurance ecosystem is maturing beyond just war-risk cover.
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Also Read: UPI MDR from October 15: Will Insurance Premiums Cost More?
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