General Average is an element of maritime law that applies to shippers who must share a proportional loss. The proportional loss is defined as a required contribution by all participants within the vessel’s journey. This may include jettisoned cargo, vessel stranding/abandonment, collisions, and fires.
If a vessel owner decides that cargo must be sacrificed for safety or any other reason, a General Average calculation will occur that dictates the amount of loss each participant must share. This is typically determined by an appointed General Average adjuster.
General Average is one of many reasons that savvy shippers elect to purchase cargo insurance.
