Free of particular average (FPA)
A type of marine cargo insurance providing minimum cover in the US market. London Institute of Underwriters “C” Clauses, offer virtually the same coverage in other markets. Free of particular average covers:
- Total or partial loss from stranding, sinking, burning or collision.
- Total loss from errors in vessel management, boiler bursting, defects in hull or machinery and explosion.
This coverage is usually inadequate for shipments of goods of more than nominal value. Nevertheless, Incoterms rules accept minimum-cover insurance in the absence of any agreement to the contrary. Therefore, the seller and the buyer should carefully define the coverage that they want, and should clearly agree that the responsible party provide it. FPA is the opposite of all risks and London Institute of Underwriters “A” Clauses, which provide maximum cover, especially when augmented to include war, strike, riot and civil commotion perils.