LOSSES IN OCEAN MARINE INSURANCE

LOSSES IN OCEAN MARINE INSURANCE
The losses in Ocean Marine Insurance are generally of two types Loss (2) Partial Loss.
1. Total Loss: Total loss is subdivided into (i) Actual total toss ( constructive total loss.

Actual Total Loss. The actual total ocean marine loss occurs when the ship carrying the goods sinks in the sea, catches fire and is burnt to ashes, the pirates take away the ship and remains missing, then it is said to be the actual total loss.
Constructive Total Loss. A constructive total loss is said to have taken place when the actual loss appears to be unavoidable and the expenditure incurred on the repair of ship or the recovery of goods exceed their total value. Under the above circumstances, the company abandons the attempt of repairing the ship, or recovering of the cargo and makes the claims of the policy holders for indemnification.
2. Partial Loss. Partial Loss technically called average is also subdivided into two categories (a) General Average (b) Particular Average.
General Average. If the ship suffers a loss or damage at sea and the loss isof a general nature which has been undertaken to preserve the ship or the cargo,then the loss is to be borne by all the underwriters in the vessel.
Particular Average. Particular average is the loss of a particular interestwhich may be in the ship alone or cargo alone and is incidentally caused by aperil insured against. In particular average the loss is partial and is not voluntary.For instance, a ship may strike against a rock and is partially damaged. Theinsurer in such a case will make good the partial loss suffered by the ship.