General average bond and guarantee

A container ship reaches Rotterdam after a fire, the shipowner has declared general average, and consignees learn that they will not collect their containers without formalities. The shipowner has a lien on the cargo for the contribution that will be due, and exercises it. To lift the lien, the consignee signs a general average bond, the average bond, by which it acknowledges its possible debt and agrees that the adjustment will settle the amount. The bond comes with security. Most often it is a general average guarantee issued by the cargo insurer, which stands surety without a cap or up to a fraction of the insured value. Failing that, the consignee deposits in cash a percentage of its goods' value, often between 10% and 25%, in a joint account managed by the adjuster. That mechanism explains why the cargo insurer enters the file very early, sometimes before the insured has understood what is going on. The same mechanism exists for the salvor's reward, who demands security over the salved value before handing back ship and cargo. The insurer signs the guarantee only after checking that the insured is covered for general average, and adds a non-admission clause to reserve its coverage defenses.