Loss Adjustment refers to the process in international trade and insurance of assessing, adjusting, and determining the compensation amount for losses incurred in cargo transportation or property insurance. It is typically carried out by an insurance company's claims adjuster or an independent loss adjuster. Its main use scenarios include: losses to goods during sea, air, or land transportation due to natural disasters, accidents, theft, failure to take delivery, etc. After the insured reports the claim to the insurance company, the insurer commissions an adjuster to investigate the cause of loss, evaluate the extent of loss, review claim documents, and ultimately determine the compensation amount. Note: Loss Adjustment is different from 'Loss Settlement,' which focuses on the actual payment of indemnity; Loss Adjustment emphasizes the investigation and adjustment process. In addition, Loss Adjustment may involve general average adjustment, which must be based on the Maritime Code or the York-Antwerp Rules. It is also different from 'Loss Prevention,' which focuses on ex-ante risk control. Foreign trade practitioners should understand the deductible, compensation limits, and who bears the adjustment costs in insurance clauses to avoid claim rejection due to incomplete documents or delayed reporting.
📝 Examples
1. After the goods arrived at the port, we found that some electronic products were damaged by seawater immersion. We immediately reported the claim to the insurance company and cooperated with the loss adjuster in on-site survey and document review, ultimately determining the compensation amount. (Note: This example shows that after a cargo loss, the insured cooperates with the loss adjustment process to obtain compensation.)
2. In a general average case, after the shipowner declares general average, each cargo owner must participate in loss adjustment, and the adjuster apportions sacrifices and expenses based on the value of the saved property. (Note: This example shows loss adjustment in a general average scenario, involving apportionment calculation.)
💡 Foreign Trade Tips
Foreign trade terms are the foundation of international business communication
Trade practices may vary slightly by country; pay attention when using them
When using terms in contracts, specify the applicable version (e.g., Incoterms 2020)
For unfamiliar terms, use GlobalSync's multilingual email helper to confirm with your partner