Particular average is a marine insurance term for partial loss or damage affecting a specific cargo shipment or vessel interest, rather than a shared loss across all parties in the voyage. If insured cargo is damaged by an accidental event such as seawater, fire, collision, or handling damage, the loss may be claimed by the owner of that specific property under the relevant insurance policy. Unlike general average, particular average is not shared proportionally by all cargo owners. Under a Named Perils policy, particular average may only be covered if the loss results from a listed peril.
- An all-risk policy covers particular average losses from any external cause
- A Named Perils policy only covers particular average if the cause is on the list of insured perils
- Free from Particular Average (FPA) policies do not cover partial losses at all
- Most modern cargo policies are all-risk and cover particular average losses
Related terms: Cargo Insurance, All-Risk Coverage, Declared Value.
