General Average
An internationally accepted rule of the sea. When a ship is in danger of total loss the master has the right to sacrifice property involved in maritime adventure and/or incur reasonable expenditure to prevent the total loss, for the safety of the common adventure. On successful completion of the adventure, or if it is abandoned in a place of safety, on successful attainment of such place the ship is declared as entering 'under average'. Security (deposits or guarantees) is taken from each cargo interest and an average adjuster is appointed for calculating the value of the saved interest. Each interest is required to contribute a rate-able proportion to make good the general average loss. Underwriters are liable only if the general average act was caused by an insured peril (liability limited to the insured value of sacrificed insured property and to the proportion of the general average contribution).
