Marine Liability, Protection and Indemnity
Protection and Indemnity (P&I) covers the third-party liabilities of a shipowner that hull policies do not: crew injury and illness, passenger claims, cargo damage liability, pollution, wreck removal, stowaways, fines, and collision liability for the excess over the hull's collision clause (the "RDC" - running down clause - typically covers 3/4 of collision damage).
P&I is usually written on a mutual basis through clubs, with calls (premiums) assessed to members. It is liability, not property, insurance, and it is generally claims-made rather than occurrence-based in many modern placements. Understand the knock-for-knock principle in offshore contracts, the Hague/Hague-Visby, Hamburg, and Rotterdam Rules limits on carrier liability, and the Limitation of Liability Convention (LLMC) tonnage-based caps.
Traps: (1) Assuming hull covers all collision liability - it typically covers only the RDC share, leaving the balance to P&I; (2) conflating cargo liability (carrier's exposure under the bill of lading) with cargo insurance (shipper's own cover); (3) missing that pollution and wreck removal are often P&I-only; (4) confusing crew injury (P&I) with longshore/harbor worker injury (may be covered by a separate endorsement or by the terminal's own policy).
Rule of thumb: if the loss is damage to someone else's person or property, think P&I; if the loss is damage to your own ship, think hull.
Worked example: A vessel collides with a pier, causing $2,000,000 in damage to the pier and $500,000 to the hull. The hull policy's RDC covers 3/4 of the pier damage ($1,500,000); P&I covers the remaining 1/4 ($500,000) plus any pollution cleanup, subject to club limits.