December 23, 2020 | Cargo Insurance, Industry Insights, Insights, Shippers Interest Cargo Insurance

Planning Ahead for a Potential General Average

Share This:


ONE Apus via Twitter


On November 30th, the cargo ship, ONE Apus, sailing from Yantian, China to Long Beach, CA, encountered severe weather. Swells exceeding 20 feet struck the vessel. An estimated 1816 containers were lost overboard, and containers remaining onboard received significant damage. Current estimates are that over $200 million worth of cargo was lost or damaged. The ship is now berthed in the port of Kobe, Japan, where operations are underway to remove containers.  

 One of the most pressing unknowns around this accident is whether or not the vessel owners will declare a General Average (GA). A General Average is a partial loss shared proportionally by all parties involved in the voyage, namely the cargo owners and the vessel owner. In a GA, cargo owners are expected to contribute financially to the voyage loss, and they need to post a financial guarantee, usually in the form of a bond, to have their goods released. 

 If you find yourself fielding calls from clients who have cargo damaged or lost at sea and may also need to navigate through the difficulties of a General Average, some general guidelines can help you walk them through this trying time. 

 Insured cargo:

Cargo insurance is designed to respond to claims for damaged or lost cargo and expenses for the GA Contribution required to release cargo. The Roanoke claims team will work directly with the insurance company to post the security deposit or GA Guarantee and provide documents needed to expedite the cargo’s release. Please refer to the Claims section on our website for detailed instructions and a list of required documents. You can also contact the claims team directly at 847.969.7064 or via email at 

 Uninsured cargo: 

When cargo is uninsured, the cargoowner must inform the Average Adjuster as soon as possible, and the adjuster will require a cash deposit in the place of an insurer’s Average Guarantee. The cargo owner should contact the Average Adjuster directly to post the bond. It’s important to note that the cargo owner’s security is held until the GA adjustment is complete. This process can last for two years or more, and if it is less than the final adjusted amount, the security may never be returned.  

 Recommendations for NVOCC’s and Freight Forwarders  

The NVOCC, who issued a bill of lading, should not sign GA Bonds, GA Guarantees, or admit any liability. While an NVO’s name may be listed as the shipper on the carrier’s records, the NVO is not liable for the cargo’s GA contributions; this is the cargo owner’s duty. 

The NVOCC/Freight Forwarder can best serve uninsured cargo owners by notifying them as soon as possible when a GA is declared and providing them with a copy of the letter from the Average Adjuster. The Average Adjusters letter will include a brief description of the event, a request for a statement of value for the cargo, and a request for a signed GA Bond form. 

The uninsured cargo owner must understand that their cargo cannot be released against the House Bill of Lading. The cargo can only be released with a signed guarantee by an insurer or a signed bond form from the cargo owner. The responsibility to pay the GA contribution attaches to the cargo, not to the contract of carriage. Therefore, the obligation to pay the contributions for the GA lies with the cargo owner. 

We also recommend that the NVOCC/Freight Forwarder collect and retain all transit documents until the GA is settled. Insurers and their legal counsel may need them in the event of any litigation resulting from the GA. 

Catastrophic loss events such as the ONE Apus heavy weather disaster highlight the importance of securing cargo insurance for every shipment. Cargo insurance is designed to respond to claims for damaged or lost cargo and expenses for a GA Contribution, and the right policy facilitates the process of releasing the shipper’s cargo from the steamship line. Without insurance, cargo owners will suffer unexpected expenses, delays in retrieving cargo, and limited financial recovery.  

Call us today at 1.800.ROANOKE (800.762.6653 ext. 1066) to learn how we can help you to protect your clients with cargo insurance. 


Share This:


2023 NCBFAA Scholarship & Application Announcement

Roanoke Insurance Group is delighted to once again sponsor a $5,000 scholarship to students intending to join the trade industry. The National Customs Broker and Forwarder Association of America (NCBFAA) offers this $5,000 scholarship award yearly and will be presented to the winner at the NCBFAA annual conference in April 2023. The topic for this […]

Industry Insights

Is your Business Exposed to the Risks of Employee Distracted Driving?

The National Safety Council(NSC) recognizes April as Distracted Driving Awareness Month. They estimate that 4,000 deaths and 276,000 injuries occur yearly because of distracted driving crashes. Additionally, distracted driving is the cause of 10% of all fatal crashes. Many of these accidents and fatalities are attributed to drivers engaging in risky behavior such as cell […]

Commercial Business Insurance, Industry Insights

Security Risks In Today’s Supply Chain: Expert Tips to Combat Theft and Fraud

Glenn Patton, Managing Director for Roanoke Insurance Group Canada, sat with Tony Pelli of BSI Supply Chain Solutions to discuss supply chain risks and management strategies. From warehouse thefts to risks associated with transporting goods, there are many proactive checks that logistics service providers can implement to mitigate the impact of supply chain issues on […]

Cargo Insurance

Sign up for our latest articles and events.

Roanoke is the leading provider of insurance and surety solutions for transportation and logistics providers. In fact, we are recognized as the most reliable source for U.S. customs bonds.


If you have any questions or need help, feel free to contact with our team.



1501 E. Woodfield Road

Suite 400W

Schaumburg, IL 60173


390 Bay Street

Munich Re Centre, 22nd Floor

Toronto, ON M5H 2Y2

Solutions that Go the Distance.

© 2021 Roanoke Insurance Group Inc. A Munich Re company

Better Business Bureau logoCoverholder at Lloyd's logo