Category: Marine cargo insurance · Reviewed by the Apex broking team · Last reviewed 2026-08-21
Category: Marine cargo insurance Also known as: GA, general average contribution, general average sacrifice and expenditure Related concepts: York-Antwerp Rules, salvage
General average is one of the oldest principles in commercial law: where, in time of peril, part of a maritime venture is intentionally sacrificed — cargo jettisoned, water poured into a burning hold, an engine strained refloating a grounded ship — or extraordinary expenditure is incurred for the common safety, the resulting loss is not left where it falls. Instead it is shared by all the property interests that were saved, each contributing in proportion to the value of what arrived safely. The principle predates insurance by many centuries and operates independently of it.
When a shipowner declares general average after a casualty, an average adjuster is appointed to work out the sacrifices and expenditures allowed in general average and to apportion them over the contributing values of ship, cargo and freight. The adjustment is governed by the contract of carriage, which almost always incorporates the York-Antwerp Rules, the standard international framework for what is allowed and how it is valued. Adjustments in significant cases can take years to complete.
The shipowner has a lien over cargo for its contribution, and in practice will not release goods at destination until security is provided. Security conventionally takes the form of a general average bond signed by the cargo owner, supported either by a guarantee from the cargo’s insurers or, where the cargo is uninsured, by a cash deposit. This is where the principle bites hardest: an uninsured cargo owner whose goods arrived entirely undamaged can face a demand for a substantial cash deposit — and ultimately a contribution — simply because other property in the venture was sacrificed to save the whole. Insured cargo owners hand the demand to their insurers, who provide the guarantee and pay the contribution in due course.
General average is not a historical curiosity. Container-ship casualties — fires, groundings, engine failures requiring salvage — have kept it prominent, and the size of modern vessels means a single declaration can involve thousands of cargo interests, each needing to provide security before its containers move. For any business shipping goods, a general average declaration on a vessel carrying its cargo is a realistic, if infrequent, event.
Standard marine cargo insurance responds to general average. All three sets of Institute Cargo Clauses — including the narrow C clauses — cover general average sacrifice of the insured cargo and the cargo owner’s general average and salvage contributions incurred to avoid loss from an insured peril, and cargo insurers routinely provide the guarantees that release goods after a declaration. Prompt release of cargo after a casualty is, in practice, one of the strongest arguments for insuring cargo at all.
General average reverses the intuition that undamaged goods mean no loss. The exposure exists whenever goods travel by sea, it arises without any fault on the cargo owner’s part, and the immediate cost of being uninsured is measured in blocked cargo and cash demands rather than damage. It belongs in any assessment of whether cargo cover is worth buying.
This entry is part of the Apex Insurance Wiki. Last reviewed 2026-08-21. Next review: 2027-02-21.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
Apex Insurance Brokers serves UK professional services firms and commercial businesses. Call 0117 325 0027, email info@apexinsurancebrokers.co.uk, or request a quotation.
Get a quote