What does Free of Particular Average mean? Read on to discover the definition & meaning of the term Free of Particular Average - to help you better understand the language used in insurance policies.
Free of Particular Average
Marine insurance provision which limits the liability of an insurance company to only those losses that exceed a specified percentage of the value of the goods. It is similar to the deductible clause included in other types of insurance, but is not applicable where a cover for total loss is in force. FPA conditions are applied where the goods are extremely susceptible to damage, or are rendered almost worthless from exposure to water or heat. However, its usage differs in the UK (where it applies to partial loss caused directly or indirectly by mishaps such as burning, collision, sinking, or stranding of the ship) from its usage in the US (where it applies only to loss caused directly by such mishaps).
We hope the you have a better understanding of the meaning of Free of Particular Average.