OPEN POLICY BASIS OF VALUATION SEC 163 IC General average and particular

Open policy basis of valuation sec 163 ic general

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OPEN POLICY BASIS OF VALUATION, SEC 163, IC
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General average and particular average losses are classified as partial losses. A partial loss under marine insurance is when only part of the insured property is lost or damaged and in which case the insured must be indemnified to the tune of the damaged part. A loss in a marine adventure can either be total or partial and as such any loss other than total loss would be classified as partial. (Sec 129 & 130, IC) A partial loss therefore could either be a general average or a particular average loss . GENERAL AVERAGE VS PARTICULAR AVERAGE
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It is a partial loss because not the entire cargo or property would be damaged but only a part of it. The loss would be borne by the persons directly affected by the damage to the said cargo or property. The damage could either be to the cargo or the ship. Insurer is liable for a particular average unless the policy excludes it. A marine insurer is liable upon a partial loss, only for such proportion of the amount insured by him as the loss bears. (Sec 159, IC) PARTICULAR AVERAGE
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The damage and expenses suffered by the ship (hull and machinery) during the voyage: Damage to the propellers of a ship Damage received in a collision Damage caused by stranding The damage suffered by the cargo during the voyage: A part of a cargo is destroyed by sea water or about 4 out of 10 of a number of cargoes are destroyed. Fire damage on cargos PARTICULAR AVERAGE EXAMPLES
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A loss that directly affects two or more interest in a common marine adventure. This loss involves an extraordinary sacrifice reasonably made during a peril for the sole purpose of preserving other properties in a common marine adventure. The sacrifice in itself should be aimed at preserving the whole marine adventure and should be made for the common safety of all other interests. A general average loss would require contributions from all the other interest (cargo owners) involved in the marine adventure to make good the sacrifices or expenses. This is known as general average contribution. GENERAL AVERAGE
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In general, it includes all damages and expenses which are deliberately caused in order to save the vessel , its cargo or both at the same time, for real and known risk. This sacrifice could include throwing of some cargo over board (jettison), using cargo as fuel, cutting away of spare or sails etc. The sacrifice could also be in the form of an extraordinary expenditure which includes money expended for the general safety of ship, cargo and crew with certain expenditures like charges for repairs, expenses incurred in lightening and reloading a vessel etc. GENERAL AVERAGE EXAMPLES
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Marine insurer is liable for all the expenses attendant upon a loss which forces the ship into port to be repaired. (Sec 165, IC) Where it is stipulated in the policy that the insured shall labor for the recovery of the property, the insurer is liable for the expense incurred thereby. (Sec 165, IC) A marine insurer is liable for a loss falling upon the
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