Which of the following terms is used in marine insurance when the cargo suffers partial loss?
Answer Details
The term used in marine insurance when the cargo suffers partial loss is "Particular Average."
Particular Average refers to the partial loss or damage of cargo during transportation, caused by a specific peril such as rough weather, fire, or theft. In this case, the loss is borne by the owner of the affected cargo and not shared with other cargo owners. The loss or damage must exceed a certain threshold, usually a percentage of the cargo's value, for the claim to be valid.
On the other hand, General Average is a principle in maritime law that applies when a voluntary sacrifice is made to safeguard the vessel and the remaining cargo, such as throwing cargo overboard to lighten the ship during a storm. In this case, all cargo owners share the loss proportionally, including those whose cargo was not sacrificed.
Floating Policy and Open Cover are insurance arrangements that cover multiple shipments or voyages and do not specifically relate to partial loss or damage of cargo.