- 15-Oct-2025
- public international law
In maritime shipping, general average and particular average are two key concepts used to define how the financial responsibility for loss, damage, or expenses is shared among the parties involved in the transportation process. These averages are mechanisms for allocating costs resulting from damage or loss during the transportation of goods by sea, ensuring fairness and preventing any one party from bearing the entire financial burden. Understanding the differences between general average and particular average is crucial for shipowners, shippers, insurers, and all other stakeholders in the shipping industry.
General Average refers to a situation in which extraordinary sacrifices or expenditures are made for the common good of the voyage, typically to save the ship, cargo, and the lives of the crew from a perilous situation. In such cases, all parties involved in the voyage (shipowner, shipper, and other interested parties) share the financial burden based on the value of their respective cargo or property.
If a ship is in danger of sinking, the shipowner may order the jettisoning (throwing overboard) of cargo to lighten the load and save the ship. This action benefits the entire voyage, including cargo and shipowners.
In a general average situation, the cost of the sacrifice or expenditure (such as cargo jettison, towing expenses, or repairs) is shared by all parties involved in the shipment based on the value of their cargo.
If a vessel carrying various goods encounters a storm and the captain decides to throw overboard a portion of the cargo to save the ship, the financial loss from the cargo jettisoned will be shared by the shipowner and the cargo owners based on the value of the remaining cargo. Each cargo owner will pay a proportionate contribution to cover the loss incurred.
General average can be declared in situations such as a ship being stranded, saving the ship by sacrificing cargo, or when unusual expenses arise for the safety of the ship.
A shipowner or the cargo owners can recover their contribution through marine insurance, with the insurer covering the costs based on the policy terms.
Particular Average refers to a loss or damage that is sustained by a specific party's cargo during transit and is not the result of any collective action taken for the common benefit of the voyage. Unlike general average, particular average does not involve a shared financial responsibility between the parties, and the loss is borne by the specific owner of the goods.
Particular average applies when a specific party (typically the cargo owner) suffers a loss or damage to their cargo, and it does not result from a collective sacrifice for the benefit of the entire voyage. This damage is typically covered under the terms of cargo insurance.
The owner of the damaged goods bears the financial responsibility for the loss and is typically compensated by their own marine insurance policy. There is no sharing of this cost with other parties involved in the shipping process.
If a package of electronics on board a vessel is damaged due to mishandling, but no collective action (like cargo jettisoning) was taken to save the ship, then the damage to that specific cargo is considered particular average. The shipper or cargo owner will seek compensation for the damage from their own cargo insurance policy, without involving other parties in the voyage.
Particular average applies to damages or losses that happen as a result of ordinary accidents, such as cargo being damaged by water leakage, rough handling, or breakage during loading or unloading.
The cargo owner may recover the costs through cargo insurance, depending on the terms of the policy and whether the cause of the loss is covered.
| Aspect | General Average | Particular Average |
|---|---|---|
| Definition | Loss or damage shared by all parties due to actions for the common benefit of the voyage. | Loss or damage specific to an individual party, not caused by collective actions. |
| Who Bears the Cost | All parties (shipowner, cargo owners) contribute based on the value of their cargo. | Only the individual cargo owner who suffers the loss bears the cost. |
| Example | Jettisoning cargo to save the ship during a storm. | Damage to a specific cargo item due to mishandling or poor packaging. |
| Cost Distribution | Shared proportional contribution from all parties involved. | The individual owner bears the full cost of the loss or damage. |
| Insurance Coverage | Covered by marine insurance or cargo insurance, with contributions from all involved parties. | Typically covered by the cargo owner's insurance (e.g., all-risk or named-perils). |
| Risk Type | Collective action in response to an emergency or peril. | Individual risk to a particular cargo during transit. |
A cargo vessel is en route from Singapore to Los Angeles, and it encounters a severe storm in the Pacific Ocean. The ship captain orders some of the cargo to be jettisoned (thrown overboard) in order to lighten the ship and prevent it from capsizing.
In this case, the ship, as well as the remaining cargo, is saved by sacrificing some of the goods.
The owners of the remaining cargo will share the financial burden of the lost goods. This shared burden is distributed based on the value of the cargo each party has onboard.
For example: If the value of the remaining cargo is $1,000,000 and one cargo owner's goods worth $100,000 were thrown overboard, the other cargo owners will help cover the $100,000 loss according to the proportion of their own cargo's value.
A container ship is carrying goods, including fine wine. During transit, the container with the wine is damaged when a heavy cargo item falls on it due to improper stacking. The wine is spilled, and the cargo owner incurs a loss.
This loss is specific to the wine shipment, and there was no collective sacrifice made for the benefit of the entire voyage.
The cargo owner of the wine will bear the financial loss and can file a claim under their cargo insurance to recover the cost of the lost goods.
No other parties involved in the shipment (like the shipowner or other cargo owners) will bear any part of the loss.
In maritime law, general average and particular average are two methods used to allocate the financial responsibility for losses or damages during shipping. General average arises when a collective action is taken to protect the ship and its cargo from a common peril, and the costs are shared among the parties involved. Particular average, on the other hand, applies to individual losses that affect only one party’s cargo and are not the result of a collective sacrifice. Understanding these concepts helps ensure fairness in the distribution of shipping risks and provides a clear framework for resolving financial disputes between shipowners, shippers, and cargo owners.
Answer By Law4u Team
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