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particular average in marine insurance
Table of Contents
Introduction
Particular Average in Marine Insurance 2.1 Definition of Particular Average 2.2 Examples of Particular Average 2.3 Calculation of Particular Average 2.4 Exclusions from Particular Average 2.5 Contribution in General Average
Conclusion
Introduction
This response will delve into the concept of particular average in marine insurance, drawing upon relevant provisions from the Kenyan legal framework. The discussion will encompass the definition, examples, calculation, exclusions, and contribution in general average, providing a comprehensive understanding of this crucial aspect of marine insurance.
2. Particular Average in Marine Insurance
2.1 Definition of Particular Average
Particular average, also known as "partial loss," refers to a loss that affects only a specific part of the insured cargo or vessel. It is a loss that is not shared by all the parties involved in the voyage. This concept is defined in the Marine Insurance Act, Cap 408 of the Laws of Kenya.
Source: Marine Insurance Act, Cap 408 of the Laws of Kenya
2.2 Examples of Particular Average
Examples of particular average include:
Damage to a portion of the cargo: If a portion of the cargo is damaged due to a fire, the loss is considered particular average.
Damage to a part of the vessel: If a part of the vessel is damaged during a storm, the loss is considered particular average.
Expenses incurred to save the cargo or vessel: If expenses are incurred to save the cargo or vessel from further damage, these expenses may be considered particular average.
Source: Marine Insurance Act, Cap 408 of the Laws of Kenya
2.3 Calculation of Particular Average
The calculation of particular average involves determining the proportion of the loss that is borne by the insured. This is typically calculated as follows:
Loss: The actual amount of the loss incurred.
Value at Risk: The value of the insured property at the time of the loss.
Particular Average Percentage: (Loss / Value at Risk) x 100
Source: Marine Insurance Act, Cap 408 of the Laws of Kenya
2.4 Exclusions from Particular Average
Certain losses are excluded from particular average, as specified in the Marine Insurance Act. These exclusions include:
General average losses: These losses are shared proportionally by all parties involved in the voyage.
Losses due to inherent vice: Losses caused by the inherent nature of the cargo, such as spoilage or decay.
Losses due to the insured's negligence: Losses caused by the insured's negligence or willful misconduct.
Source: Marine Insurance Act, Cap 408 of the Laws of Kenya
2.5 Contribution in General Average
In cases where a general average sacrifice is made to save the entire venture, the insured may be required to contribute to the general average loss. This contribution is calculated based on the value of the insured's property at risk.
Source: Marine Insurance Act, Cap 408 of the Laws of Kenya
Conclusion
Particular average is a crucial concept in marine insurance, representing a loss that affects only a specific part of the insured cargo or vessel. Understanding the definition, examples, calculation, exclusions, and contribution in general average is essential for both insurers and insured parties to navigate the complexities of marine insurance claims. The Marine Insurance Act, Cap 408 of the Laws of Kenya, provides a comprehensive framework for addressing these aspects, ensuring fairness and transparency in the settlement of particular average claims.
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