General Average

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general average

What is General Average?

A lot of people who send and receive cargo worldwide by sea don’t realise that that they are also partly legally responsible for the safe journey of the ship. Under maritime law, if a ship carrying carrying cargo experiences difficulties, or is lost, then the costs of of this loss are split proportionately between the ship owners, and the cargo owners.

When a ship is engaged to deliver goods, or for any other reason this is called a marine adventure. In circumstances where a ‘marine adventure’ is in peril, a ship captain may declare General Average, whereby cargo interests and the ship owners must bear the costs involved in ensuring the safety of cargo and ship.

Costs are split between cargo and ship in proportion to the respective values at risk.

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