Average Clause

An average clause, also known as a general average clause, is a provision in a contract of carriage or an insurance policy that allocates the costs and expenses incurred during a maritime incident proportionately among the parties involved. The purpose of an average clause is to distribute the financial burden resulting from the sacrifice, loss, or expenses incurred for the common benefit of all parties.  

The clause ensures that all parties, including the cargo owners, shipowners, and insurers, share the costs in a fair and proportionate manner, reflecting their respective interests and contributions.