Particular Average

What Does Particular Average Mean?

Particular average is a marine insurance provision that holds the shipper responsible for losses incurred to the ship or its cargo when the ship is exposed to a specific danger. This contrasts with the cargo owner being held liable and required to pay for the losses. The clause appears in commercial marine insurance policies, which cover vessels and the goods they carry.

Insuranceopedia Explains Particular Average

Significant losses to ships or their cargo are not uncommon. For instance, a fire might break out on a ship, it could capsize, or improperly secured cargo could fall overboard. Therefore, it is crucial for the ship owner to understand their liabilities. A particular average provision helps clarify this by specifying that if the ship owner is responsible for the cargo, they cannot expect the cargo owner to cover the damages. The same question of who is liable for property in another party’s care also comes up in bailee insurance, which covers businesses holding goods that belong to their customers.