Definition
A maritime principle where all cargo owners share the loss when some cargo is sacrificed to save the voyage.
General average is an ancient rule of the sea: when the master deliberately sacrifices part of the cargo or incurs extraordinary expense to save the ship and remaining cargo from a common peril, all parties with property at risk contribute proportionally to the loss.
When declared, cargo can be held until owners post a general-average bond or guarantee, which is where marine cargo insurance proves vital — the insurer covers the contribution. It can arise from events like fire, grounding, or jettison.
Related terms
Marine Cargo Insurance
Insurance covering loss of or damage to goods while in transit by sea, air, or land.
Force Majeure
A contract clause excusing a party from performance when extraordinary events beyond its control intervene.
Carrier
The party that physically transports the goods and contracts to carry them, e.g. a shipping line or airline.
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