Marine Losses

Partial Loss

Total Loss
What is Total Loss
 Actual total Loss
 Presumed Total Loss
 Constructive Total Loss.
Actual Total Loss

 Subject matter is destroyed or

damaged to such extent that it
ceases to be a thing of the kind
Insured.
Presumed Total Loss

 When subject Matter (ship) in

missing, total loss is presumed after
a lapse of reasonable time
Constructive Total Loss

 Subject matter is reasonably

abandoned, as it can’t be preserved
without an expenditure in excess of
value of subject matter.
 There options available:
 Either retain possession.
 100% partial loss.
 Abandon subject matter.
Notice of abandonment
 To indicate intention to abandon
subject matter.
 Notice may be given in any manner
either verbal or written.
 Assured is given reasonable time to
make inquiry of information of loss
prior serving NOA.
 Acceptance of NOA either expressed or
implied.
 Mere silence by insurer not treated as
acceptance.
Notice of Abandonment

 Not Necessary if :
 No benefit to U/W at time when
assured recd info of loss.
 U/W waive notice.
 Reinsurance.
Notice of Abandonment

 Once accepted, can’t be revoked.

 Acceptance admits liability and
sufficiency of notice.
Partial Loss

 Particular Average.

 General Average.
Particular Average
 Partial Loss of the subject matter
insured caused by peril insured
against which is not a general average
loss.
 Partial loss arising from any kind of
accident.
 Example :
 Straining of ship in bad weather.
 Loss of masts thru heavy weather.
 Damage to hull or machinery due
heavy weather or fire.
 Damage to ship due collision or
grounding.
Particular Average
 Protest should be noted and should be
surveyed by surveyor.
 Surveyor report should include :
 Cause and nature of damage.
 Gross sound market value of goods.
 Gross proceeds of any damage goods
sold.
 Agreed amount of depreciation of
damaged goods sold.
 Cost of Sale.
 Charges incurred in survey.
Particular Charges

 Expenses incurred by or on behalf of

the assured for the safety or
preservation of the subject-matter
insured, other than general average
and salvage charges, are called
particular charges.
 Particular charges are not included
in particular average.
 Expenses recoverable under sue and
labor clause known as “particular
charges”.
Particular Charges; example

 Ship has cargo on board and earning

freight. She strands, and master hires
service of tugs to refloat ship and after
necessary repair continue voyage. Cost of
tug and repair =========== ?
 Same case ship in ballast and earning no
freight. Cost of tugs and repairs
========= ?
 Same case with or without cargo strands.
Another ship comes on scene and
volunteers to pull her off and tow to POR.
Cost of tow ========== ?
Particular Charges

 Recoverable only when :

 Incurred solely for benefit of subject
matter insured.
 Are reasonable.
 Incurred by assured himself or by his
agent or servant.
 Incurred to avert loss or minimize loss
covered under insurance.