This month we have been discussing general average: A long-time concept in maritime law that states that all parties involved in a vessel’s voyage should equally share any losses incurred during cargo transport. In other words, if a ship finds it necessary to lose or destroy some cargo for the good of the voyage and crew, all merchants and shippers involved equally take on the burden of the loss.
General average law is outlined in detail in the York Antwerp Rules, which were established in 1890 and amended in 1994. Here are some of the most important clauses:
- For a loss to be considered under general average, the cargo must be scarified under extraordinary conditions and for the good of the ship and crew.
- You can apply general average only when cargo with material value is lost during an extraordinary event—not due to delays or indirect losses (such as loss of market).
- A party’s share is not determined by fault when general average is used. All parties are treated equally. However, if one party is at fault, other maritime laws may apply.
- If cargo can be salvaged, the expense of salvage operations should be split among the affected parties using general average.
- If damaged cargo can be sold at a lower rate, the difference between the price of the undamaged cargo and the damaged cargo is the general average.
Cargo vessel accidents and damaged cargo claims can be complicated, especially if multiple merchants and parties are at play. Understanding the law of general average is key to understanding these complex claims. Speak to a skilled maritime insurance attorney about our general average claim to learn more about your unique case. Our experienced team offers a free initial consultation to discuss your matter: 888-614-7730.