A recent fire incident on the NYK Delphinus off the coast of California and the subsequent declaration of General Average has highlighted the perils faced by ships at sea and the importance of cargo owners having the appropriate insurance coverage.

Japanese carrier NYK, part of Ocean Network Express (ONE), declared General Average on the NYK Delphinus following an engine fire as it was en route from the Port of Vancouver to Oakland on 14 May. The vessel was 50 miles offshore from Monterey when the US Coast Guard responded to a request for assistance. The crew brought the fire under control and tugs then towed the ship towards Oakland, its destination port.

A fortnight later, NYK announced they had appointed Greece-based Oceana Marine Claims & Adjusting and Marine Adjusting Solutions as the average adjustor, stating they would be ‘responsible for coordinating the collection of General Average securities and all documentation required from parties with interest in cargo onboard, containers, vessel, and vessel fuel’.

General Average: What is it and what does it mean for your business?

Whilst the declaration of General Average was previously rare, it has been more common since the turn of the century. The costs that are redistributed following the declaration can be significant and could potentially affect cargo owners, including the refusal to release goods until the owner accepts responsibility and any associated costs. Marine insurance provided by movers should include cover for where General Average is declared.

For General Average to be properly declared by the ships owners/master there must be:

1. An event that is beyond the ship owners control, which imperils the entire venture
2. A voluntary sacrifice
3. Something saved

The ‘sacrifice’ might be the jettison of specific cargo, the use of tugs or salvors or damage to the ship. General Average also requires that all parties concerned in the maritime venture (Hull/Cargo/Freight/Bunkers) contribute to making good the ‘sacrifice’. They share the expense in proportion to the value at risk in the venture, therefore highlighting the importance of cargo owners having the appropriate insurance coverage in place.

Flexible marine insurance cover – anywhere in the world

At Reason Global, we understand all aspects of the different international markets and the complexities of events like NYK Delphinius. Our marine insurance policies can cover goods internationally and are available to movers based anywhere in the world at any time via our dedicated online portal.

Find our more about Marine Insurance for Movers here ››