General Average Clause

Category: legal

A maritime law principle where all cargo owners share the financial loss if cargo is intentionally sacrificed to save the ship.

General Average is a "shock requirement" for new shippers. If a captain throws 10% of the cargo overboard to save a sinking ship, *all* shippers whose goods survived must pay a proportional share to compensate the owner of the sacrificed cargo. Cargo insurance covers this mandatory liability.

Common Examples

• The container ship declared General Average after a fire, forcing all cargo owners to post a bond before their goods were released.
• Ocean cargo insurance is vital because it steps in to cover the multi-thousand dollar general average assessments levied after a maritime disaster.