General average bond and guarantee
The security you post to get your cargo released after a GA declaration.
Definition
After general average is declared, the shipowner has a lien on the cargo for its contribution and will not release it without security. That security is usually an average bond signed by the cargo owner together with a guarantee from the cargo insurer, or, where there is no insurer, a cash deposit. The adjustment itself can take years; the security is what gets the container off the terminal in the meantime.
Why it decides money
This is the single most concrete benefit of holding cargo cover. An insured cargo owner signs a bond and their insurer guarantees it. An uninsured one pays a cash deposit, often a substantial percentage of the value of their goods, before anything moves.
Related terms
- General average
- A shared bill when something is sacrificed to save the whole venture.
- York-Antwerp Rules
- The private code that decides how general average is adjusted.
More in claims and recovery
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