General Average and the Ever Given
Most of you will have heard of the recent ship stuck in the Suez Canal and some of you may have even thought about the implications of the delays caused by this incident. One country has even had to ration fuel supplies because of it!
The ship in question was the Ever Given, one of the largest ships in the world, able to carry over 20,000 (20 foot long) cargo containers. On the 23rd March 2021 the ship ran aground in the Suez Canal, blocking the canal North and South for 6 whole days. It was eventually freed by salvage operators on 29th March 2021 – the blockage caused delays to hundreds of other vessels.
Freeing a ship of this size incurs significant costs – several tugboats and dredgers were employed, plus compensation claims from the Suez Canal Authority and a variety of shipping companies caught up in the back log amount to a sizeable bill.
This bill will be shared between the ship owners/operators and the “interest” in the cargo meaning the organisations that have an interest in the cargo onboard. They will have to pay “proportionally” a sum of money towards the freeing of the ship – this is known as “General Average” when the own operator has “lien” a claim (or legal right) on the cargo.
The last time General Average was called was in March 2018, when the Maersk Honam caught fire. The General Average then stood at 54% meaning that if you had $100,000 value of goods on board then you would have to pay $54,000 to get your own goods released!
Many involved will hopefully have the appropriate Cargo Insurance in place directly with insurers or via their freight forwarders. If you import or export goods it is a cover well worth considering, give me a call and we can go in to the detail of your particular situation.
I hope you found this article helpful, informative and above all an easy read to a complex situation.
If you have questions regarding Cargo or any other type of risk or insurance related issue, please feel free to contact me. Stay safe, Nick.taylorward@konsileo.com
Navigating the Motor Fleet Sector: A Roadmap to Success
The motor fleet industry is vital to our economy, transporting goods, services, and people to keep our everything moving. However, it also presents niche challenges,
Insurance Broker Annalie Sheils: What it means to be a part of Konsileo
“Konsileo have arrived in the East Midlands and in turn we are disrupting the Insurance Broking Industry with a unique approach to Insurance that nurtures
Aaron Potts: Perfect Work-life Balance
Insurance Broker Aaron Potts: Explains how Konsileo has allowed him to find the perfect work-life balance… “I spent the first six months on guard waiting
Leigh Williamson: Security and Freedom
Working at Konsileo “Konsileo has completely ruined any other company for me, and me for any other company! I’m officially unemployable now, because I couldn’t
Insurance Reinstatement Cost Assessment
Insurance Reinstatement Cost Assessment Determining the correct value to insure your commercial property can be a tricky issue and without expert knowledge you may fall
Konsileo takes home Best Employer award at 2023 British Insurance Awards
Konsileo takes home Best Employer award at 2023 British Insurance Awards At the 2023 British Insurance awards, hosted at London’s Albert Hall, Konsileo has been
