Free from Particular Average (FPA) is one of the basic types of marine cargo transportation insurance, with the full Chinese name "Particular Average Not Covered." Its core meaning is that the insurer is liable only for total loss (actual total loss and constructive total loss) and general average, and in principle does not compensate for particular average. However, in actual business, the coverage of FPA has been expanded. For example, when the carrying vessel encounters accidents such as stranding, striking a rock, sinking, collision, fire, or explosion, the insurer is still liable for particular average caused by such events. In terms of application scenarios, FPA is suitable for low-value, bulk, and less damage-prone goods (such as ore, steel, timber, etc.), or when the buyer wishes to save on insurance premiums. Points to note: when insuring under FPA, it is necessary to clarify the characteristics of the goods and the risks of the transportation route; if the goods are fragile or high in value, it is advisable to switch to With Average (WA/WPA) or All Risks. Difference from other terms: With Average covers particular average, while All Risks further covers general external risks. Therefore, FPA is the type with the smallest coverage and the lowest premium among the three basic types of insurance.
📝 Examples
1. The steel exported in this batch is subject to CIF terms, with insurance to be effected by the seller for 110% of the invoice value against Free from Particular Average (FPA). Due to severe weather encountered during transit, part of the cargo suffered rust damage, but since no total loss or general average occurred, the insurance company shall not compensate for particular average. (Note: This example illustrates the typical situation in which FPA does not cover particular average.)
2. We suggest insuring this batch of low-value bulk ore against FPA to save on premiums. However, if the vessel runs aground en route and causes partial loss of the cargo, under the FPA clauses, the insurance company shall still be liable for the particular average caused by such an accident. (Note: This example demonstrates the exceptional compensation under FPA for particular average caused by an accident.)
💡 Foreign Trade Tips
Foreign trade terms are the foundation of international business communication
Trade practices may vary slightly by country; pay attention when using them
When using terms in contracts, specify the applicable version (e.g., Incoterms 2020)
For unfamiliar terms, use GlobalSync's multilingual email helper to confirm with your partner