General average: why you may pay for someone else's loss

General average is one of the oldest rules in shipping, and one of the most expensive surprises for an uninsured cargo owner. Your goods can arrive in perfect condition and still be held until you pay.

Updated: 2026-10-16

What it is

When a ship faces a common danger, the master may sacrifice part of the cargo or incur extraordinary costs to save the voyage: throwing containers overboard, fighting a fire, or paying for salvage and towage. Under the principle of general average, everyone with a financial interest in the voyage shares that cost, in proportion to the value of their property. That includes the shipowner and every cargo owner on board.

Today, general average is usually adjusted under the York-Antwerp Rules, which are written into most bills of lading.

What happens to your cargo

1. The shipowner declares general average.
2. An average adjuster is appointed to calculate each party's share. On a large container ship this can take years.
3. Before your cargo is released, you must provide security: a general average bond plus a guarantee, or a cash deposit, often a significant percentage of your cargo's value.
4. If you don't, the carrier can hold your goods at the port.

When the container ship Ever Given ran aground in the Suez Canal in March 2021, its owner declared general average on 1 April 2021, and cargo owners on board had to provide security before their goods were released.

How insurance helps

General average contributions and salvage charges are covered under ICC (A), (B) and (C). If you are insured, your insurer issues the guarantee for you, and your cargo can be released without you paying a cash deposit. If you are not, you pay the deposit yourself and wait for the adjustment.

That is one reason cargo insurance matters even for robust goods that are unlikely to be damaged. Read more about ICC (A), (B) and (C).

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