What is the law of "General Average" in shipping and why does it matter?
The law of “General Average" is a shipping term that matters when dealing with cargo insurance, bills of lading, and the legal issues of international freight shipping. The law of general average is a principle of maritime law whereby all stakeholders in a sea venture proportionally share any losses resulting from a voluntary sacrifice of part of the ship or cargo to save the whole in an emergency. ~Wikipedia It’s the shipping principle of maritime law. General Average occurs when a voluntary sacrifice is made to safeguard the vessel, cargo or crew from a common peril, for example, a fire. If the sacrifice is at issue, all parties shipping on the vessel contribute to the loss based on their cargo’s value whether their shipment was damaged or not. Appointed adjusters will assess the value of each shipment on board and apply a formula that determines the financial contribution of each cargo owner. If you’re a cargo owner with shipments onboard a declared “general average” v...