Average Adjustment

Average Adjustment refers to the process by which a professional adjuster, in accordance with the terms of the contract of carriage or bill of lading, assesses and apportions general average or particular average. General average adjustment requires determining the reasonableness of sacrifices and expenditures, the amount of general average, and the apportionment ratio of each party; particular average adjustment determines the extent of loss and liability for compensation. Usage scenarios include: after a ship encounters accidents such as wind and waves, grounding, or fire, the shipowner declares general average and requires cargo interests to provide security; or in insurance claims, an adjustment report is needed to determine the compensation amount. Precautions: Adjustment rules often adopt the York-Antwerp Rules, and the adjustment results are binding on all parties including ship and cargo insurers; adjustment costs are relatively high and time-consuming, which may affect cargo delivery and release. Difference from 'average': Average is the fact of loss, while adjustment is the process of loss apportionment and calculation; difference from 'insurance loss assessment': Adjustment focuses on general average apportionment, while loss assessment focuses on loss survey and damage determination. Foreign trade practitioners should pay attention to the general average clause in the bill of lading and provide security in a timely manner to avoid cargo being liened.