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General Average

In the event of a major breakdown, fire, or other serious event in which the vessel cannot continue the voyage, the master may claim “general average.”   If such a decision is made by the carrier, owners of all cargo aboard must share the cost of either repair of the ship so it may continue the voyage, or in a worst case, the cost of replacement of the entire vessel.


If the protection against financial loss provided by cargo insurance weren’t enough, the process of recovering your goods after an accident is often much easier with an insurer working on your behalf.  During shipping, sometimes it can be necessary to make a voluntary sacrifice to save the vessel, cargo or crew from peril, (e.g. jettison of cargo to extinguish a fire).  If some of the shipment is saved, all parties contribute to the loss based on their cargo’s value.  This also is known as “general average,” and it is a clause used in almost all ocean bills of lading.  Cargo insurance will handle all arrangements in such cases.  But if the cargo isn’t insured, it won’t be released until the shipper posts a guarantee, such as a cash deposit or bond for its share of responsibility.