General average losses occur when:

General average losses occur when all parties share losses due to sacrifice. This principle is based on maritime law and refers to a situation where a loss is incurred intentionally to prevent a greater loss that would affect the entire voyage and all stakeholders involved. For example, if a ship encounters a storm and the captain decides to jettison cargo to stabilize the vessel, the loss of that cargo is treated as a general average loss. All stakeholders, including the owners of the remaining cargo and the ship, share the resulting financial burden according to their interests in the voyage.

This system promotes fairness and solidarity among the parties involved in maritime activities, ensuring that individual owners do not bear excessive losses alone when facing shared risks. The concept underscores the importance of collective responsibility in maritime operations, as the actions taken to preserve the overall journey benefit all parties involved.