Guide
General average: billed for a loss that was not yours
Updated
This is the principle that surprises importers most, because it can produce a bill for cargo that arrived in perfect condition. It is old, it is still live, and it is a strong practical argument for insuring.
The principle
Where an extraordinary sacrifice or expenditure is made to save a common maritime adventure, the loss is shared between all interests in proportion to value. If containers are jettisoned or a salvage operation is mounted, every cargo owner contributes.
Your goods can be undamaged and you can still owe money.
What it means in practice
General average is declared, security is demanded before cargo is released, and adjusters calculate contributions afterwards, sometimes years later. Uninsured cargo owners must post security themselves.
Insured cargo owners hand it to their insurer, which is precisely the value of the policy in this scenario.
Meanwhile, the clock runs
While general average is being resolved, cargo sits. Detention and demurrage continue to accrue, and the Federal Maritime Commission has issued a final rule on how those are billed.
That is a second, separate cost stream, and it is why the practical answer to a general average declaration is to have an insurer already engaged.
Why it is not rare enough to ignore
Groundings, fires and container losses happen often enough that any regular importer will encounter a declaration eventually.
The premium for cargo cover is small relative to the security demand in a general average, which is the comparison worth making rather than premium against the chance of a damaged box.