General Average is a difficult concept to grasp. But you must, if you are an importer or exporter.

1. GENERAL AVERAGE…
Dealing with Disaster at Sea…
And how it effects you…
Brought to you by Janel

2. The law of General Average is a legal principal of maritime law. All parties, in a sea
venture, proportionally share losses which result from a voluntary sacrifice of part
of the ship cargo to save the whole or from damages to the ship.
This is what it really means:
All cargo aboard a vessel must contribute to the costs when a vessel is damaged,
gets in trouble or must jettison cargo to stabilize the ship.
It’s akin to taking a taxi and when the cab gets a flat tire, you would have to pay
half the cost to fix the tire!
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3. When Do Carriers Declare General Average?
General Average is typically declared with the following events:
• Grounding/stranding which can lead to expenses such as cost of discharging, storage,
reloading of discharged cargo, loss or damage to cargo through jettison
• Fire which can lead to expenses such as damage to cargo through efforts to extinguish the
fire, port of refuge expenses
• Cargo shifting in heaving weather can lead to expenses such as
jettison of cargo, port of refuge.
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4. The Claim Settlement Process
To settle a General Average claim, all freight is held/detained as the following takes
place:
• The value of the voyage is determined
• “Participation” is determined
• The loss amount is determined
• The participation percentage is applied to the loss amount to
determine the security deposit
• The security deposit, also called the General Average Guarantee,
is provided to the vessel owner or General Average adjuster by
your insurance company in exchange for the release of your
customer’s cargo

5. What Is the “Security Amount”
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6. Key Tip
If a cargo owner is uninsured, they must post a cash
deposit in order to release his/her cargo.
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7. Waiting to get insurance until you “need it”, is waiting too long.
Call Janel today. We have strategies to ensure you have a cost effective
solution to reduce your exposure
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8. PLEASE CONTACT OUR DIRECTOR OF COMPLIANCE, SEAN
MCCLUNG AT SMCCLUNG@JANELGROUP.COM OR 401-727-
1776 X 1114
WE LOOK FORWARD TO HELPING YOU CREATE STRATEGIES
THAT MATTER!
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