Free of particular average

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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

  1. Glossary of Shipping Terms, Maritime Administration, Washington, DC, 2008 - www.marad.dot.gov/documents/Glossary_final.pdf
  2. 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. 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
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