Legal Definitions - general average loss

Definition: A loss incurred at sea usually when cargo is thrown overboard to save the ship. It is a loss due to the voluntary and intentional sacrifice of part of a venture (usually cargo) to save the rest of the venture from imminent peril. Such a loss is borne equally by all the interests concerned in the venture.

Example: A ship carrying cargo encounters a storm and starts taking on water. To prevent the ship from sinking, the captain decides to throw some of the cargo overboard. The cargo that was thrown overboard is considered a general average loss, and the cost of the loss is shared equally among all parties involved in the venture.

Explanation: The example illustrates how a general average loss occurs when part of a venture is intentionally sacrificed to save the rest of the venture from imminent peril. In this case, the cargo was thrown overboard to prevent the ship from sinking, and the cost of the loss is shared equally among all parties involved in the venture.