Three minutes to distinguish actual total loss, constructive total loss, general average and particular average

Three minutes to distinguish actual total loss, constructive total loss, general average and particular average

The losses that goods may suffer in maritime transportation vary. The losses caused to the insured goods in the insurance business can be divided into total loss and partial loss according to the degree of loss. Next, guohetong will share the total loss and partial loss with you.

1、 Total loss (actual total loss & constructive total loss)

Total loss is referred to as "total loss" for short, which refers to the total loss of the insured goods in maritime transportation. From the nature of loss, total loss can be divided into actual total loss and constructive total loss.

1. Actual total loss

Actual total loss, also known as absolute total loss, refers to the complete loss of the insured goods in transit, or has completely lost its original purpose, which is equivalent to total loss.

The actual total loss in insurance business mainly includes the following situations:

1) The ship carrying the cargo sank to the bottom of the sea after suffering a shipwreck, and all the insured goods were lost;

2) The cargo ship was robbed by pirates, or the cargo was seized by a hostile country. Although the cargo still exists, the property right of the insured has been completely lost and cannot be retrieved;

3) Some insured goods, such as cement, which hardens after being soaked in seawater, and tobacco leaves, which mildew after being wet, have lost their original commercial value or use;

4) In international trade, according to the distance of the voyage and the navigation area, if the cargo ship is missing, there has been no news for quite a period of time, and it is also regarded as the total loss of the insured goods.

2. Constructive total loss

Constructive total loss means that the actual total loss of the insured goods is unavoidable, or the sum of the costs of rescuing, restoring, repairing the damaged goods and transporting the goods to the original destination has exceeded the value of the goods at the destination in order to avoid the actual total loss.

The circumstances constituting the constructive total loss of the insured goods are as follows:

1) After the insured goods are damaged, the repair cost exceeds the value of the goods after repair;

2) After the insured goods are damaged, the cost of sorting and continuing to transport to the original port of destination has exceeded the value of the goods after they arrive at the original port of destination;

3) The actual total loss of the insured goods cannot be avoided, and the rescue cost required to avoid the total loss will exceed the value of the goods rescued;

4) The insured has lost the ownership of the insured goods, and the cost of recovering the ownership has exceeded the value of the insured goods.

2、 Partial loss (general average & particular average)

Partial loss refers to the loss that does not belong to actual total loss and constructive total loss. In other words, all losses that do not belong to actual total loss and constructive total loss are called partial losses. Some losses can be divided into general average and particular average.

1. General average

General average means that when the ship, cargo and other interested parties are in danger and in common danger during the voyage, the ship consciously and reasonably makes sacrifices or pays special expenses in order to maintain the common safety of the ship and cargo or continue the voyage. These special sacrifices and expenses are called general average.

For example, in order to save the ship and the whole cargo, the captain had to order that some of the cargo on the ship be thrown into the sea to reduce the weight and make the ship float to safety. Therefore, goods thrown into the sea belong to general average. Another example is that the propeller of the ship fails or falls down during navigation, so that the ship loses control. In order to escape the danger, the captain had to call for help to the nearby port and asked to send a tug to tow it. This additional expense incurred as a result of the employment of tugboats for towing is also general average.

General average must generally have the following characteristics:

1) The danger leading to general average must first be real, or inevitable, rather than subjective speculation, and the danger must endanger the common safety of ships and goods;

2) All measures must be intentional and reasonable in order to remove the common danger of the ship and cargo;

3) And the loss must be the direct or reasonable consequence of general average measures, which is of a special nature, and the expenses are paid additionally. Therefore, the sacrifice and expenses of general average should be borne by all interested parties.

2. Particular average

Compared with general average, particular average is a kind of partial loss, but it is purely caused by accidental accidents, and no human factors are included; The loss suffered only involves the self-interest of the owner of the ship or cargo, and does not relate to the interests of the ship, cargo or even freight. The loss directly caused by it shall be borne by the cargo insurance interest alone.