What Is General Average in Maritime Insurance?

General Average is a clause in Maritime insurance, which is defined under section 66 of the Marine Insurance Act 1963. A General Average in Maritime Insurance is a ‘sacrifice’ made by the assured in order to prevent the insured articles from getting damaged. The sacrifice of goods must be made voluntarily and reasonably to preclude the more significant cause. General Average loss rarely takes place. However, when it occurs, an insured may lose millions of dollars of cargo and the vessel while protecting human life.

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History of General Average in Maritime Insurance

The General Average in Maritime Insurance was first codified under the York Antwerp Rules of 1890. Later, in 1949, it was recognised by American companies. Gradually, the General Average in Maritime Insurance was incorporated by several countries, including India, in order to enshrine it in the marine insurance laws. The York Antwerp Rules remain in force and have been updated several times since 1890.

Elements of General Average in Maritime Insurance

Barnard v. Adams:

In this case, Mr. Justice Grier stated three elements required to form General Average in Maritime insurance. If any of these elements is absent, the insured party cannot claim damage under the marine insurance policy.

Listed below are three elements stated by Justice Grier:

  • First, there must be a common danger to all participants in the cargo. The threat must be imminent and inevitable for the crew of the ship.
  • The risk could only be avoided by voluntarily sacrificing fewer portions of the ship in order to save the large portion.
  • The attempt to avoid the imminent peril and save the ship must be successful.
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Conclusion

General Average in Maritime Insurance is an act or sacrifice committed by the crew or insured to prevent the total loss of the ship. However, the surveyor can determine if the claim meets the essential elements of the General Average in Maritime Insurance. Upon proper examination, the insured may get indemnified for the losses incurred.

Written By: PolicyBazaar - Updated: 20 March 2024

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Policybazaar for Business - Marine Insurance - Customer Reviews
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4.3/5
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3.8 April 20, 2023
Anas
Great Experience
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4.3 April 03, 2023
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Provides Comprehensive Protection
When it comes to coverage, Marine insurance that i bought from PolicyBazaar has exceeded my expectations. It provides comprehensive protection for my cargo and vessels during transit, ensuring I can focus on my business operations with peace of mind. Thankyou.
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4.3 March 17, 2023
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4.3 February 28, 2023
Vishal
User Friendly Interface
The website's user-friendly interface made it easy to compare different plans and find the perfect fit for my business needs.Thanks
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4.3 February 11, 2023
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Prompt Services
I appreciate the transparency and honesty with which Policybazaar handled my claims. They were prompt in processing my claim and their claim settlement process was hassle-free.Thanks PolicyBazaar.
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3.8 February 10, 2023
Rishabh
Exceeds Expectations
I recently had the pleasure of purchsing marine insurance from Policy bazaar website and I must say it has been an outstnding experience from start to finish. I am thrilled to share my positive customer review, as this truly exceeded my expectations. Thanks PB.
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3.8 January 31, 2023
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3.8 January 21, 2023
Vishal
Excellent Support
The customer service provided by Policy bazaar was decent. Their team was responsive, knowledgeable and went above and beyond to assist me at every step. Their professionalism and commitment to customer satisfaction were truly commendable.Thankyou.
Mumbai
4.3 January 11, 2023
Sanjeev Rathor
Efficient Process
When it came to claims processing, Policy bazaar demonstrated remarkable eficiency and effectivenes. I had an unfortunate incident during the coverage period and filing a claim was a breeze. The entire process was streamlined and their team guided me throuugh every necssary step, making it hassle-free. The promptness with which my claim was setled reflected their commitment to their customers' well-being and peace of mind. Thankyou.
Pune
3.8 January 01, 2023
Kunal
Comprehensive Coverage
I must mention the comprehensive coverage provided by the marine insurance policy I purchasd through Policy bazaar. It offered me the necesary protection and peace of mind. Thankyou PolicyBazaar.
Indore