Category: Marine · Reviewed by Chrissie Anderson, Client Executive · Last reviewed 2026-06-05
Particular average is a partial loss of the subject-matter insured caused by a peril insured against, falling on a single interest and not constituting a general average loss, defined and codified in section 64 of the Marine Insurance Act 1906.
Category: Marine insurance Also known as: PA, particular average loss, single-interest partial loss First codified: Marine Insurance Act 1906, s.64 Related legislation: Marine Insurance Act 1906 [1]
Particular average is the second principal form of average recognised in marine insurance, distinct from general average and from salvage. Section 64(1) of the Marine Insurance Act 1906 defines particular average loss as ‘a partial loss of the subject-matter insured, caused by a peril insured against, and which is not a general average loss’. The defining characteristics are that the loss is partial (not total), caused by a covered peril, and falls on a single interest rather than being shared between multiple interests in the adventure [1][3].
The term ‘particular’ in particular average derives from ‘a particular interest’ bearing the loss. By contrast, general average is shared between all interests in proportion to value. In a typical voyage involving a vessel, cargo from multiple owners and the carrier’s freight, a particular average to one cargo interest is borne by that interest alone (and by its insurer if cover is in place), whereas a general average act for the common safety is shared.
Section 64(2) clarifies that ‘particular charges’ - expenses incurred by or on behalf of the assured for the safety or preservation of the subject-matter insured, other than general average and salvage charges - are not included in particular average. Particular charges are not subject to average and are recoverable in full where covered. In modern policies they are addressed through the sue and labour clause under s.78 of the Act, which requires the assured to take reasonable steps to minimise loss and entitles recovery of the resulting expense [1].
Examples of particular average loss include: heavy weather damage to one cargo interest in a single hold; sweat damage to a particular consignment from condensation in the container; damage to part of a hull during a routine grounding; partial fire damage to one cargo lot in a stack; theft of part of a consignment from a container during transit; and refrigeration breakdown affecting one shipper’s frozen cargo. Each is a partial loss caused by a covered peril (where applicable) falling on a single interest.
Section 64 of the MIA 1906 provides the statutory definition. The section operates in conjunction with: s.55 (perils insured against), which defines when an insurer is liable for a loss; s.65 (salvage charges), which addresses payment for rescue services; s.66 (general average); s.67 to s.78 (measure of indemnity), which set the basis on which particular average is quantified; s.78 (sue and labour); and s.79 (subrogation) [1].
The measure of indemnity for particular average is set by ss.67 to 77 and varies by class of insurance. Under s.71, particular average on goods is computed as the difference between the gross sound value and the gross damaged value at the place of arrival, multiplied by the insured value ratio. This sound and damaged formula is the standard basis for cargo particular average claims and is applied by surveyors at destination [1].
The Insurance Act 2015 modernised disclosure and warranty law for commercial marine contracts entered into after 12 August 2016 and introduced the implied term of payment within a reasonable time in s.13A, applicable to all classes including particular average. The substance of particular average and its quantification under the MIA 1906 is unchanged [2].
The franchise and excess provisions in marine policies historically determined when particular average was payable. The ‘memorandum’ in the SG Form, which originated in 18th century practice, excluded particular average for certain commodities (typically grain, salt, fruit) below a specified percentage of damage, treating partial losses below the franchise as not covered. Modern policies use deductibles rather than franchises - the deductible reduces every claim by a fixed amount rather than imposing an absolute threshold for cover.
The Institute Cargo Clauses treat particular average differently across the three wordings. ICC (A) covers particular average from any cause not excluded. ICC (B) covers particular average from named perils only. ICC (C) covers particular average only from a short list of major casualties.
Particular average claims are the bread and butter of marine cargo and hull claims handling. The starting point in any partial loss is to determine whether the loss is particular average or general average. If the loss is borne by a single interest and was not the result of an extraordinary sacrifice for common safety, it is particular average [1][3].
A typical cargo particular average claim proceeds as follows: the assured (typically the buyer or seller of the goods) notifies the insurer’s nearest correspondent on discovery of damage; the correspondent appoints an independent surveyor to inspect the goods; the surveyor establishes the cause of loss (essential for determining whether the loss is covered under the applicable ICC wording), the extent of damage and the indemnified value of the loss; documents are gathered (commercial invoice, packing list, bill of lading or air waybill, claim against carrier, survey report); and the insurer pays the assured the indemnified value, taking subrogated rights against the carrier and any other responsible party.
The sound and damaged formula under s.71 is applied as follows. If the sound value of the goods at destination would have been £100,000 and the damaged value (typically a salvage sale value) is £40,000, the depreciation is 60%. The insurer’s liability under a £100,000 insured value is 60% of £100,000 = £60,000 (subject to deductible). The formula ensures that the insured value at the time of cover, rather than fluctuating market values, determines the indemnity.
Hull particular average is quantified differently. The standard basis is the reasonable cost of repair, with no deduction for new for old (s.69 modifies the older common law rule). Repairs are typically tendered at multiple yards and the lowest reasonable tender is applied. Standing repair tariff agreements with established yards may apply.
Particular average operates differently across classes of marine insurance. In cargo, it is the principal form of claim, covering damage to goods during transit. In hull, it covers damage to the ship from grounding, contact, fire and other covered perils, with the cost of repair the standard measure. In freight, it covers a partial loss of freight where the ship is partly unable to perform the contract of carriage [1][3].
For high-value or particularly vulnerable cargo, additional clauses modify standard particular average treatment. Brand and label clauses provide for damage to high-value branded goods requiring removal of branding before salvage sale - the cost of unbranding is added to the indemnified loss. Brands and labels clauses are typical for pharmaceuticals, luxury goods and other branded merchandise.
Deductibles for particular average vary by class and trade. Cargo deductibles are typically modest (£500 to £5,000 per shipment for general cargo, higher for bulk commodities). Hull deductibles are often substantial ($50,000 to $500,000 per casualty), reflecting that smaller damage is dealt with by the shipowner.
The American Institute Marine forms and continental European hull and cargo wordings recognise particular average in similar terms, though the precise quantification rules vary. The conceptual division between single-interest partial loss (PA) and shared partial loss (GA) is common to all maritime traditions.
A UK importer of consumer electronics receives a shipment of LED televisions from East Asia, insured for £540,000 under an annual open cover with ICC (A). The container is offloaded at a UK port and trucked to the importer’s central warehouse. On unstuffing, the importer finds that approximately 200 televisions in the lower layers of the container have been damaged by water ingress through a damaged container door seal. A surveyor inspects, confirms the cause as external water ingress (not condensation, which would be inherent vice and excluded), and quantifies the loss using the sound and damaged formula. The sound value at destination of the 200 damaged units would be £108,000; the damaged value (salvage sale to a refurbishment trader) is £18,000. The depreciation is 83.3%. The insurer pays 83.3% of the insured value of those 200 units (calculated on a pro-rata basis from the total insured value), less the policy deductible of £1,000. The insurer pursues subrogated recovery against the shipping line for failure to maintain seaworthy containers.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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