Definition – General average is a principle of maritime law which dictates that all parties with freight on-board proportionally share any losses sustained when cargo must be jettisoned to save a ship.
How does this affect my shipments? – Even if your shipment is not damaged or lost during an emergency, but General Average is declared on that voyage, you are still responsible for your pro-rated portion of the entire loss. With a proper All-Risk marine insurance policy, general average coverage is included and shippers can have their cargo released without additional requirements. If a shipper failed to insure, they must first post a bond before receiving their cargo.
History – The York-Antwerp Rules of 1890 were most recently amended in 1994. These international rules provide uniform guidelines on the law of general average and determine the rights and obligations of all parties.
Related Terms – Cargo Insurance