General average (GA)
General average (GA) is more than 3,000 years old. Nevertheless, it is still widely acknowledged as a fair legal institution. It means that, where ship and cargo are in common peril, the cost of preserving the endangered property shall be mutually borne by all parties gaining the benefit from such action.
The clearest example may be a salvage case, but also sacrificial damage by jettison of cargo or extinguishing fire on board are typical general average situations. Sacrificial damages are foreseeable and accepted for the purpose of salving the remaining property values.
GA is handled by average adjusters and usually settled in accordance with the York-Antwerp Rules (YAR). Claims for contribution in GA are secured by a lien on the property under obligation. This lien will usually be lifted after adequate other security has been provided.
Please check the GA guidelines provided by the Comité Maritime International (CMI).
The YAR are published by the Comité Maritime International (CMI).
Security collection
General
Funds remitted as cash deposit security remain in our separate trust account until the general average adjustment is finalized. Depending on the circumstances of the case this can take considerable time.
Once the adjustment is ready, the general average contribution due from the secured cargo will be paid from the cash deposit. Any excess amount remaining will be refunded to the payee.
Cash security will be held in a separate trust account.
In case of GA
- GA Bond, signed by the owner (often the receiver) of the cargo
- Commercial invoice
- Packing list
- Bill of lading
In case your commercial invoice states the incoterm EXW, FCA, FAS, or FOB, please also provide:
- Freight invoice
If you have cargo insurance, please provide in addition:
- GA Guarantee, signed by the cargo insurance
Please register with our casualty portal CascoS. After successful registration you can download the corresponding templates. Please refrain from using templates not downloaded from CascoS.
If you have not received instructions for a CascoS registration please contact our office.
No. The GA Bond is for signature by cargo owners (shippers or consignees) while the Guarantee must be signed by the cargo insurer.
In line with shipowners’ instructions we may have to reject a GA Guarantee in certain cases, e.g. if the insurer does not meet the required rating, if we have had negative past experience with that insurer, or if there are reasons to believe the GA Guarantee was not signed by the insurer.
Maritime salvage services are rendered by professional salvors. In simple cases they may just be paid by the shipowners, but in more demanding circumstances the salvor, as an external service provider, may be entitled to a proportionate salvage award from each individual salved interest. This salvage award must then be secured separately by way of a salvage guarantee (or cash deposit).
Particular average (PA)
A particular average (PA) is accidental damage affecting one ore more interests individually, whereas GA is about intentional sacrifices or other measures for the common safety and benefit of all the property interests on a sea voyage.