Policy & Compliance
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General Average was declared after the Ever Given grounded in the Suez Canal during 2021.
It is prudent to ensure that cargo insurance is in place – the costs following a GA incident can be significant
In order to protect BIFA Members, Clause 20 (d) of BIFA’s STC deals with the situation where a Member finds itself liable for a GA claim for contribution either as a shipper or consignee, where it is mentioned on the bill of lading. However, liability for the General Average contribution should fall on the cargo owner who is the party responsible for arranging the relevant cover from their cargo insurer. Clause 22 of the BIFA STC clearly places responsibility for promptly providing proper security for goods subject to General Average on the customer. Conclusion While infrequent, the risk of GA losses should not be overlooked. It is prudent to ensure that cargo insurance is in
place – the costs following a GA incident can be significant. The final General Average demand in a recent case exceeded 60% of contributory values. As GA is something that will be infrequently encountered, it is important to ensure that Members have a clear understanding of the process and their general responsibilities. Also, Members should fully understand requests being made of them and the repercussions should the process not be followed.
BIFA would like to thank the TT Club for allowing BIFA to re-use information included in this article
January 2023
11
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