What is General Average and when is it declared?

• A. A bonus paid to crew for safe voyage
• B. A tax levied by port for shipments
• C. A penalty for late loading
• D. A sacrifice or expenditure made to save the voyage; costs are shared among all parties; GA is declared by the master or shipowner when necessary.

Answer: (D)

General Average is a risk-sharing principle in maritime practice: when a deliberate sacrifice or extraordinary expense is incurred to save the voyage, the loss is shared among all interests in the voyage, rather than borne by the party that suffered the sacrifice alone.

It is declared when a situation arises that threatens the voyage and requires actions to save the ship and cargo—things like jettisoning cargo to lighten the vessel, salvage operations, firefighting, towing, or other necessary expenses. The declaration is made by the master or the shipowner, signaling that those costs and any resulting losses will be shared by all parties with an interest in the voyage.

After declaration, the specific shares are calculated by an average adjuster, and contributions are apportioned according to each party’s value at risk (and other established rules). The cargo interests, the ship, and their insurers typically participate, with the aim of ensuring the voyage can be saved without one side bearing all the burden.

This is not a crew bonus, a port tax, or a late-loading penalty. It’s a mechanism to share the cost of actions taken to prevent total loss of the voyage.