What Is General Average? A Costly Risk for Uninsured Cargo
Maritime Risk · 4 min read
General Average (GA) is a maritime legal concept: when a vessel and its cargo face a common peril, the costs of saving them are shared among all parties with an interest in the voyage, in proportion to value — even if your own cargo was never damaged.
When Is GA Declared?
- A vessel is stranded, disabled or suffers engine failure.
- Cargo is jettisoned to save the vessel.
- Cargo is damaged in order to protect the vessel (e.g., water used to fight a fire).
How Is the Contribution Calculated?
A GA adjuster conducts the adjustment, considering the value of the vessel, the value of the cargo and the value of any other interests involved in the voyage — each party then contributes in proportion.
Does Insurance Cover GA?
- GA is governed by international maritime law and is a complex legal concept.
- Standard cargo insurance does not necessarily cover GA contributions — coverage depends on the policy terms; always confirm before shipment.
- If your policy excludes GA, consider purchasing a separate GA guarantee or bond to protect against this risk.
Risk alert: once GA is declared, uninsured cargo owners may be required to post a security deposit before cargo can be released. For valuable shipments, confirm your policy covers GA contributions before sailing.
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