General average for cargo owners: security, documents and first steps

Last reviewed: 14 August 2026

When a shipowner declares general average, even undamaged cargo may be withheld until its owner provides acceptable security and signs the required undertaking. The first step is to notify the cargo insurer or broker immediately and send the adjuster's notice—before signing forms or making a payment without guidance.

Quick answer: what to do after the first notice

1. Notify your cargo insurer or broker on the same day.

2. Identify the vessel, voyage, bill of lading and affected goods.

3. Ask the average adjuster for the cargo-release forms and instructions.

4. Gather the policy or certificate, commercial invoice, packing list and transport document.

5. Coordinate the average bond and insurer's guarantee—or the required deposit if no applicable insurance responds.

6. Keep general average security separate from any physical cargo damage claim.

7. Preserve rights against carriers and third parties; do not admit a final amount.

What is general average?

Article 347 of Spain's Maritime Navigation Act 14/2014 defines a general average act as an intentional and reasonable extraordinary sacrifice or expenditure made for the common safety of property involved in a maritime adventure when all of it is threatened by danger.

Depending on the facts and applicable rules, examples may include:

• jettisoning cargo to protect the common adventure;

• engaging tugs to refloat a grounded vessel;

• certain expenses at a port of refuge;

• extraordinary sacrifice or expenditure to fight a fire;

• cutting away or sacrificing part of the vessel or equipment for common safety.

Not every cost following a casualty is general average. It must satisfy the applicable legal or contractual test and be admitted in the adjustment.

Why undamaged cargo may have to contribute

General average distributes admitted sacrifices and expenditure among the saved interests—ship, cargo and, where relevant, freight. Under Article 349, holders of interests at risk contribute proportionately, capped by the saved value of each interest.

The question is therefore not only “Was my cargo damaged?” but also “What value was saved by the common action?” Intact cargo may contribute, while sacrificed cargo may receive an allowance in general average, subject to the adjustment.

Why the cargo can be withheld

Article 352 allows the shipowner to retain cargo on board or ashore until sufficient security is provided. Cargo interests must also sign an undertaking identifying the goods and their value.

Two documents are common in practice:

Document	Usually provided by	Practical purpose
Average bond	Cargo owner or cargo interest	Undertaking to pay the contribution ultimately found due
Average guarantee	Cargo insurer acceptable to the adjuster	Guarantees payment on its terms and will often avoid a cash deposit

If there is no insurance, the adjuster may request a cash deposit or other security. Forms, amounts and recipients vary; follow the adjuster's and insurer's instructions.

Providing security to obtain delivery does not necessarily accept the final adjustment or waive every defence. The wording still matters and should be reviewed before signature.

Documents to prepare

• general average declaration or notice;

• vessel, voyage and casualty date;

• bill of lading, sea waybill or multimodal document;

• commercial invoice and packing list;

• cargo insurance certificate or policy;

• insured value and valuation basis;

• evidence of the interest in the goods;

• delivery instructions and consignee details;

• photographs, reservations and survey report if goods are damaged;

• correspondence with the carrier, forwarder and adjuster;

• bond, guarantee or deposit forms.

Do not send originals without controlling where they go. Keep complete copies and evidence of delivery.

Does cargo insurance cover the contribution?

Institute Cargo Clauses (A), (B) and (C) 1/1/2009 include, under Clause 2, general average and salvage charges adjusted or determined according to the contract of carriage and/or governing law and practice, where incurred to avoid or in connection with avoiding loss from a covered cause.

That does not mean every declaration is automatically paid. Check:

• wording and edition incorporated into the policy;

• cause of the danger and applicable exclusions;

• insured transit, goods and interest;

• sum insured and valuation basis;

• limits, deductibles and special conditions;

• compliance with notification and mitigation duties;

• sanctions and territorial restrictions where relevant.

ICC C may respond to a general average contribution linked to one of its named perils, even though its physical damage cover is narrower than ICC A. The cause, exclusions and complete contract remain decisive.

Cargo damage and general average are separate files

One shipment can generate two different claims:

1. security and the eventual general average contribution;

2. physical loss, shortage or expense suffered by the cargo itself.

Do not wait for the final adjustment before investigating cargo damage. Issue reservations, arrange a survey where appropriate, retain packaging and protect time limits against the carrier.

How is the contribution calculated?

The average adjuster identifies admissible sacrifices and expenditure and determines contributory values. The admitted amount is then apportioned in proportion to those values under the agreed rules and governing law.

Simplified example

If total contributory values were €50 million and admitted general average were €5 million, the purely illustrative rate would be 10%. Cargo with a contributory value of €200,000 would provisionally contribute €20,000.

The real calculation can include deductions, arrived values, particular average, expenses, currency, interest, commissions and specific rules. Initial security does not predict the final amount.

Which rules apply?

The bill of lading, charterparty or other carriage contract will often incorporate a version of the York-Antwerp Rules. Check the named version; do not assume it is always 2016.

Article 356 of the Spanish Maritime Navigation Act permits the parties to choose adjustment rules and, absent a contrary specification, refers to the latest York-Antwerp Rules. The Comité Maritime International identifies YAR 2016 as the latest version, with a technical amendment to Rule XXI approved in 2022.

What if the shipowner caused the danger?

Under Article 351, where the danger was caused by the fault of an interested party, the responsible party bears the loss and expense and innocent interests do not contribute.

However, alleging fault may not secure immediate cargo release. Investigation can be complex, contractual rules may also apply and security may still be requested pending determination. Notify insurers and reserve all rights expressly.

Incoterms® and the sale contract

An Incoterm® helps identify when risk passes between seller and buyer and who arranges certain carriage or insurance. It does not, by itself, decide liability to provide general average security to the shipowner.

Review together:

• sale contract;

• Incoterm® and named place;

• bill of lading;

• ownership or cargo interest at the casualty date;

• who arranged insurance and who is insured;

• payments and documents already exchanged.

Mistakes that delay cargo release

• waiting days before notifying insurers;

• sending a certificate for the wrong voyage;

• signing incomplete forms or changing wording without coordination;

• paying a deposit without confirming the recipient;

• confusing security with a physical damage claim;

• failing to prove commercial value;

• allowing carrier claim time limits to expire;

• assuming ship fault instantly removes the security requirement.

Frequently asked questions

Can my intact container be withheld?

Yes. Retention may continue until sufficient security for the potential contribution is provided.

Is an average bond an invoice?

No. It is an undertaking connected with a contribution to be determined later; it does not itself fix the final amount.

Must I pay a deposit if I am insured?

An acceptable insurer's guarantee will normally be sought instead. The outcome depends on the policy, insurer and case requirements.

How long does an adjustment take?

It can take months or years depending on complexity, documentation, number of interests and disputes. Cargo can be released earlier once acceptable security is provided.

Does ICC A always cover general average?

No absolute assurance is possible. Clause 2 must be read with the cause, exclusions and all policy conditions.

Can I also claim physical cargo damage?

Potentially, if a covered cause and all conditions are established, but it should be documented as a separate claim.

Fast coordination protects cargo and legal rights

The priority is to coordinate the cargo owner, insurer, broker and average adjuster so that correct security is provided without losing rights. Suitable cargo insurance and organised documentation can prevent deposits, delay and unnecessary disputes.

Nautilux Marine Insurance can review the notice, coordinate security and assist with the cargo claim. Send us the general average declaration and shipment documents for an initial review.

*General information only. It is not legal advice and does not confirm cover. The outcome depends on the facts, contracts, adjustment rules, policy and governing law.*