General Average – Are you covered?

 

When you ship by sea, cargo insurance is a must. Even if your shipment seems indestructible… isn’t travelling far… or isn’t very valuable, insuring oceangoing goods is always recommended.

 

Without insurance, you could be on the hook for a significant charge if a General Average is declared.

 

General Average is a principle of maritime law that says if a ship or its cargo sustains loss or damage as a result of a voluntary sacrifice in an emergency, the vessel owner and cargo owners will proportionally share the cost of those losses. This law would be invoked, for example, if a ship was caught in a major storm or ran aground, and some of the cargo was jettisoned to avert imminent peril.

 

Once the ship has landed, the law of General Average requires each party whose cargo landed safely to contribute an amount, proportional to their share of the cargo, to compensate for the lost or damaged goods (and/or damage to the ship).

 

Invoking the law of General Average is not as uncommon as you might think. And it can come as an unwelcome – and expensive – surprise.

 

The good news is that, with the right insurance policy, your portion of the claim will be covered, so you won’t be out of pocket.

 

No one can guarantee problems won’t come up, but you can take steps to protect yourself. Cole’s insurance offerings include cargo insurance that covers all your bases – including declarations of General Average. With decades of experience in providing shipping and freight solutions, were here to help. For detailed information, contact your Logistics Coordinator. For more general information, contact us today to discuss your options.