Provision in maritime law where all shippers on a given voyage would reimburse the ship line in the event of vessel sinking or catastrophic damage. It also provides for the reimbursement to those shippers whose cargo was thrown overboard in order to save the vessel. Bloomberg Financial Dictionary
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general average UK US noun [U] INSURANCE, LAW
► an agreement in which the cost of damage to a ship or the goods it is carrying is shared by the shipping company and the owners of the goods if it becomes necessary to save either the ship or the goods in an emergency: »
While general average traces its origins in ancient maritime law, it remains part of the law of most countries.
Financial and business terms. 2012.