The profession of Average Adjusting evolved from the mercantile need of an impartial and dispassionate authority, which can address questions / resolve issues that arose with an increase in maritime trade, as also risks associated with sea transportation alongwith development of marine insurance. Today, the role and duties of an Average Adjuster are very onerous due to various factors, such as, rapid changes and increase in trade and commerce, increase in the size / type of vessels, development of shipping technology (e.g. unmanned vessels), contentious legal decisions, increase in piracy cases, multitudinous interests involved, new regulatory developments e.g. SOLAS, MARPOL, COLREGS, Ballast Water Management, Global Sulphur Cap – 2020.

The Oxford English Dictionary defines ‘Average’ as the apportionment of loss of ship, cargo or freight through unavoidable accidents (Particular Average), or through intentional damage to a ship, or sacrifice of cargo (General Average) among the owners or insurers. A Particular Average loss is a loss borne fully by the party upon whose property it takes place and, is so called, in distinction from a General Average loss for which diverse parties contribute.

LMA mainly deals with the Hull and General Average Claims and also handles Cargo or Energy Claims when requested by the insurers. Statement of Claim against third parties or a Statement of Division of Recoveries from third parties in Collision cases are also prepared by LMA. The task of an Average Adjuster in a very large Container Ship General Average assumes gigantic proportion and, LMA assists not only in security collection from the concerned in cargo, but also ensures that they receive delivery without any delay.

Accidents do happen at sea either due to natural phenomenon or human factors and, at LMA, we assist in overcoming the aftermath of such accidents. At such times, an Average Adjusters can assist in formulating claims arising from such accidents, advice on claim presentation, insurance coverage and related matters. It may be prudent that every complicated claim be referred to a qualified Average Adjuster as Fellows of the Association of Average Adjusters have over time demonstrated their skill and expertise. As member of the Association of Average Adjusters, we at LMA strictly follow the ‘Code of Conduct’ and ‘Rules of Practice’ framed by the Association to attain uniformity in practice.

On occurrence of a maritime accident, one of the first functions of an Average Adjuster is to deal with Shipowner’s request for a ‘Payment-on-Account’ to alleviate financial difficulties. LMA works in close liaison with the Shipowners / Charterers / Operators / Managers, their Engineers / Superintendents, Cargo Owners, Freight Forwarders, Brokers on one side and Underwriter’s Claim Examiners and Surveyors on the other side. At times coordinating with the legal profession is also necessary, as their involvement in the present day casualties has become more intense and inevitable.

LMA collates appropriate documentation and, after a meticulous and thorough scrutiny of circumstances and facts, recommends the claim in an impartial, independent and fair manner. Based on extensive knowledge of legal principles, as well as, ability to put into effect customs and practices built up over the years, Average Adjusters at LMA play a crucial role in ascertaining the extent of Underwriter’s liability by preparing a ‘Statement of Claim’ or ‘Statement of Adjustment’ as it is widely known. LMA’s penchant for figures like that of a Chartered Accountant, ensures that all relevant costs and peripheral expenses which are claimable are included in the Statement, at the same time due diligence is exercised in disallowing expenses not covered under the terms and conditions of the Policy.

Average Adjusters are generally appointed by the Shipowners, however, they may be appointed by any party to a marine claim.  In case, where the Shipowner appoints an Average Adjuster, the remuneration or fees for their services are paid by Underwriters, if the claim is admissible.