Free of particular average
From Supply Chain Management Encyclopedia
Russian: Свободно от частной аварии
Free of particular average (FPA) means a marine insurance term meaning that the assurer will not allow payment for partial loss or damage to cargo shipments except in certain circumstances, such as stranding, sinking, collision or fire.[1]. (See Table 1. below)
A FPA policy covers total losses, but covers only partial losses in some circumstances. The major issue is whether the policy is a Free of Particular Average—English Conditions policy or a Free of Particular Average—American Conditions policy. Under an American Conditions policy, partial losses are covered only if they result directly from a fire, a stranding, a sinking, or a collision. Under an English Conditions policy, the partial losses are covered if they occur on the same voyage that a fire, a stranding, a sinking, or a collision occurs, without these perils having directly caused the loss [2].
Table 1. Marine Insurance Coverage Summary
Perils Covered Against | Coverage A of the Institute Marine Cargo Clauses | Coverage B of the Institute Marine Cargo Clauses | Coverage C of the Institute Marine Cargo Clauses | All Risks Coverage | With Average (Typical Coverage) | Free of Particular Average (Typical Coverage) |
Fire | YES | YES | YES | YES | YES | YES |
Explosion | YES | YES | YES | YES | YES | YES |
Stranding | YES | YES | YES | YES | YES | YES |
Sinking | YES | YES | YES | YES | YES | YES |
Collision | YES | YES | YES | YES | YES | YES |
General Average | YES | YES | YES | YES | YES | YES |
Jettison | YES | YES | YES | YES | YES | [3] |
Loss Overboard | YES | YES | YES | YES | [3] | |
Seawater Damage | YES | YES | YES | YES | [3] | |
Lightening | YES | YES | YES | YES | [3] | |
Condensation | YES | YES | ||||
Improper Stowage by Carrier | YES | YES | ||||
Theft | YES | YES | ||||
Pilferage | YES | YES | ||||
Leakage | YES | YES | ||||
Breakage | YES | YES | ||||
Damage While Loading/Unloading | YES | YES | YES | YES | ||
Damage on land Before Loading | YES | YES | YES | YES | YES | YES |
See also Particular average insurance, Marine insurance
References
- ↑ Glossary of Shipping Terms, Maritime Administration, Washington, DC, 2008 - www.marad.dot.gov/documents/Glossary_final.pdf
- ↑ David, P., Stewart, R. International Logistics: The Management of International Trade Operations - Thomson: Mason, Ohio. 2007 Ch.10-8f - http://www.atomicdogpublishing.com/MyBackpack/ContentDisplay3-0/main.asp?book=pd-376-3-182426&Session=068AAB9A-AE8A-432A-8EE6-22D9AC5259C0 - accessed 11/26/2012
- ↑ 3.0 3.1 3.2 3.3 Under an FPA policy, any partial loss incurred would not be covered unless it is due to a ship sinking, burning, becoming stranded, or being involved in a collision; a total loss would be covered