What is General Average?
Simply put General Average is an ocean marine loss which occurs through a voluntary sacrifice of part of a vessel or cargo to safeguard the vessel or cargo from a common peril. If the sacrifice is successful, all parties will be asked to contribute proportionately to the losses based on their cargo’s value, as a shared event. Statistics show that this is not a common occurrence, however when it does happen, with the costs of a ship and cargo onboard frequently running into hundreds of millions of dollars, General Average claims can be substantial and often run into tens of thousands of dollars per container. This is when is becomes a shock to companies who have made the decision not to insure their goods in transit and whom simply took the industry standard limited liability cover. This is because when a General Average is declared by the ship’s master the cargo will not be released until the cargo owners put up a cash deposit, bank guarantee or bond, or their insurance company puts up a General Average guarantee.
We strongly suggest you check with your insurer that you are indeed covered for the above, for peace of mind. The many complexities surrounding International insurance dictate that not all freight forwarders will actively offer cover, whereas for ourselves at ConneXion World Cargo, we definitely consider it to be a value added service and recommend you speak to us about our ‘All Risk’ cover. In the event of a claim, we would then handle the intricate insurance issues as if they were our own. Please feel free to speak to your Account Manager or your local ConneXion office for any further assistance.