General Average Clause
The general average clause confirms cover for a cargo owner's share of a general average, meaning value voluntarily sacrificed or expended to save the ship and cargo, usually assessed under the York-Antwerp Rules.
- Clause type
- Condition
- Origin/Market
- London Market (LMA/NMA/Lloyd’s)
- Favours
- Neutral
- Negotiability
- Market standard
Purpose
Where a vessel is imperilled at sea, the master may order extraordinary measures to save the ship, freight and cargo as a whole, such as jettisoning cargo or putting into a port of refuge. The resulting costs and losses are apportioned, on the principle of general average and usually under the York-Antwerp Rules, among all parties concerned — ship, freight and the various cargo owners — in proportion to the value saved. The general average clause in the cargo policy confirms that the contribution allocated to the relevant cargo owner is covered by the insurance.
Effect and limits
Cover requires that the measure genuinely qualifies as a general average act — voluntary, reasonable and taken in the common interest of all parties — while losses caused purely by the peril itself, without a deliberate sacrifice, do not qualify. As no dedicated marine cargo coverage currently exists in the register, cov-yachtversicherung is referenced here as the nearest available object, even though the clause was originally developed for commercial sea transport.
Negotiation and practice
Following a general average event, cargo owners are frequently required to provide a general average bond or guarantee before their goods are released; the clause ensures that the insurer either provides this security or settles the contribution directly, without a separate assessment of the overall casualty being required.