General Average bond and guarantee

A general average bond and guarantee are the security a shipowner takes from cargo interests before releasing cargo after a general average act. Cargo cannot be lifted until the owner’s lien is satisfied, so each receiver signs an average bond, commonly the Lloyd’s Average Bond, promising to pay its share of the adjustment under the York-Antwerp Rules. The bond is backed either by a cash deposit (for uninsured cargo) or by a general average guarantee from the cargo underwriter, which removes the need for the deposit. Once security is in place the goods are released, and the average adjuster later calculates each party’s contribution.