General Average Bond

Supply chain logistics involves goods moving across long distances through various modes of transportation. Similar to land and airborne haulage, marine transport carries the risk of accidents. When such mishaps occur, multiple parties involved in the shipment process can incur unwanted losses. 

However, a General Average Bond provides a safety net for all the stakeholders. Basically, it is a guarantee provided by an insurance company or a third party on behalf of the cargo owner or the cargo’s interests. This bond ensures that cargo owners, shippers, and carriers contribute in fair estimates to cover any losses and expenses incurred from sea mishaps. 

Importance of General Average Bond 

Without this bond, there’s the risk of one entity bearing the entire impact of the losses. But a General Average Bond aligns the interests of all parties towards one goal: safeguarding the cargo. Plus, supply chain participants can rest easy knowing that there is ample financial coverage against the impacts of unfortunate incidents.