In marine insurance, when a particular cargo is thrown into the sea in order to prevent the ship from sinking, the type of marine loss is

Assessment: WAEC SSCE - Commerce - 2011 (Objective) Subject: Commerce

Question 1 Report

In marine insurance, when a particular cargo is thrown into the sea in order to prevent the ship from sinking, the type of marine loss is

Answer Details
When a particular cargo is thrown into the sea to save the ship, it is considered as a "general average loss" in marine insurance. This type of loss occurs when some cargo is jettisoned (thrown overboard) to save the vessel and other cargo. In general average, the loss suffered is shared by all the parties who have an interest in the voyage, i.e., the ship owner, cargo owner, and insurer. The contribution of each party is determined based on the value of their respective interests in the voyage. The purpose of the general average loss is to ensure that all parties bear a proportionate share of the risk in case of a maritime emergency.
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