What are the two types of loss adjustment for ocean marine loss?

The correct answer is General Average and Particular Average. In the context of ocean marine insurance, these terms refer to the distinct methods used to adjust and distribute losses that occur during maritime transport.

General Average is a principle that applies when there is a voluntary sacrifice of value to save the voyage. For example, if cargo needs to be jettisoned to save the ship and remaining cargo from sinking, the loss from that jettisoned cargo is shared proportionally among all stakeholders (i.e., ship owners, cargo owners). This principle encourages cooperation among parties on a maritime venture, promoting safety and risk sharing.

Particular Average, on the other hand, refers to a loss that is not shared among all stakeholders but is borne solely by the insured party. This type of loss typically impacts only specific cargo rather than the entire vessel or cargo. For instance, if a shipment of goods is damaged due to a storm, that loss is considered a Particular Average as it affects only the specific goods lost or damaged, excluding the costs recognized in General Average.

Thus, understanding these two adjustment methods is essential for those dealing with marine insurance claims, as they guide how losses are calculated, reported, and compensated.