Page 174 - DCOM309_INSURANCE_LAWS_AND_PRACTICES

Unit 9: Marine Insurance

It should be caused by a peril insured against. Notes
The damage should not have been suffered for a general benefit.
Particular average losses can be further categorized into:
1. Particular Average on Ship: The loss on account of partial damage to the ship from the
peril insured against is called particular average on ship. The insurer is liable to the extent
of actual cost of repairs reasonably incurred to mend the fault(s).

Notes Where there is a partial loss of freight because of the peril insured against, it is
called Particular Average on freight.
2. Particular Average on Cargo: A claim for particular average on cargo arises where the
cargo has been either partially damaged by the peril insured against or when a portion of
cargo is totally lost.
3. Salvage Charges: It is the reward paid under maritime law to the salver for saving or
helping to save property at sea or life. Further the salver must be stranger to the adventure.
In other words, he should not have been connected with the adventure. The salvage
charges are recoverable from the insurers as partial loss. If the salvage charges are
necessitated because of the unseaworthiness of the ship, the underwriter on the hull is not
liable for any portion of the remuneration awarded to salver. The salver who has saved
the property has a right to possession on it in respect of his award for the services.
General Average Loss

A General Average Loss occurs where any extraordinary sacrifice or expenditure is voluntarily
and reasonably made or occurred in time of peril, for the purpose of preserving the property
involved in a common adventure. The rule in case of general average loss is that it must be
borne rateably by the parties interested in the common adventure.

Example: Cargo ship caught fire; water is thrown to extinguish fire by which cargo is
damaged. The Loss caused by cargo is a General Average Loss.

Few more examples:
Jettisoning Cargo to lighten the ship in distress.
Money paid to pirates for the purpose of saving the ship and cargo.
Throwing of water on board of ship to extinguish fire.

Expenses incurred in taking vessel to its destination with outside help.
Self Assessment

Fill in the blanks:
13. The total losses again can be subdivided into ………………………………. total loss and
………………………………. total loss.

14. A notice of abandonment should be given by the …………………………. to the
………………………………

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