The expenses are (i) Particular charges and (ii) Salvage charges.
1. Particular Charges
Where the policy contains a “Sue and Labour” clause, the engagement thereby entered into is deemed to be supplementary to the contract of insurance and the assured may recover from the insurer any expenses properly incurred pursuant to the clause.
The clause requires the insurers to pay any expenses properly incurred by the assured or his agents in preventing or minimising loss or damage to the subject-matter by an insured peril. The essential features of the clause are as below:
ADVERTISEMENTS:
1. The expenses must be incurred for the benefit of the subject matter insured. The expenses incurred for the common benefit will be a part of general average.
2. The expenses must be reasonable and be incurred by “the assured, his factors, his servants or assigns” and this provision effectively excludes salvage charges.
3. They are recoverable only when incurred to avert or minimise a loss from a peril covered by the policy.
Sue and Labour :
ADVERTISEMENTS:
Sue and labour charges are a type of particular charges. They are incurred short of destination i.e. reconditioning costs and follow upon loss or damage, whereas particular charges may be incurred when loss in threatened imminantbut is avoided by expenses for that purpose. In real and actual sense sue and labour is a sort of particular charges.
Extra charges :
Extra charges are the expenses of proving a claim e.g. survey fees. These are payable only if the loss is payable under the policy. Where extra charges are payable by insured, insurance cover is given. For example sale, charges and auction fees incurred in disposing of damaged cargo.
2. Salvage Charges:
ADVERTISEMENTS:
Section 65 of the Act defines salvage charges as those recoverable under maritime law t>y a saw or independents of contract. It is the remuneration or reward payable according to maritime law to salvos who voluntarily and independently of contract render services to rescue or save property at sea i.e. hull, cargo and freight.
No reward for services or payments for loss or expenses can be claimed by salvers where the services were unsuccessful and the property was totally lost.
Average Adjusters:
The adjustment of general average losses is entrusted to an average adjuster. The specialised knowledge and the reputation for strict impartiality ensure that their findings are acceptable to all covalence. The adjuster’s fees are allowed in general average. This is also allowed in particular average loss.