(insurance) An insurance loss that affects specific interests only. There are two kinds of particular average losses: the total loss of a part of the goods, and the arrival of goods at destination in a damaged condition.
In the first situation, it is necessary to determine how much of the total amount insured is applicable to the missing item. In homogeneous or fungible cargo–that is, cargo which is capable of mutual substitution, like oil or coal–it is frequently a matter of simple arithmetic. The value of the unit of measurement of the cargo is found by dividing the amount of insurance by the total number of units in the shipment. This value multiplied by the number of missing units gives the value of the loss.
Where a normal or trade loss is to be expected, as in cargo subject to leakage, slackage or loss of moisture during the voyage, the method of calculation is slightly different. The value of the insurance is divided by the number of units in the “expected outturn,” that is, the expected arrived quantity rather than the shipped quantity. This can be determined either by the normal percentage of trade loss for similar shipments or by examinations of sound arrived cargo forming part of the shipment in question. While this method will produce a somewhat higher insured value per unit, it naturally requires the normal or trade loss to be deducted in calculating the actual shortage sustained.
See average; general average; with average; free of particular average; deductible average; trade loss.