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3. Scope pf Cover

1. Free from Particular Average (F.P.A.)

This insurance covers:

ⅰ) Total or Constructive Total Loss of the whole consignment;

ⅱ) Partial Loss caused by accidents—the carrying conveyance being grounded, stranded, sunk or in collision with floating ice or other objects as well as fire or explosion.

ⅲ) General Average: General Average formed part of the Rhodium Law, and was in existence centuries before marine insurance was know at all.

There have been many legal definitions of General Average, but probably the one most often quoted is that of Lawrence J. in Barkley V. Presgrave: “All loss which arises in consequence of extraordinary of the ship and cargo comes within general average, and must be borne proportionately by all who are interested.”

This insurance does not cover:

Loss or damage caused by natural calamities in the course of transit only, like tsunami. In other words, the insurer is not responsible for the loss or damage caused by natural calamities only.

2. With Particular Average or With Average (W.P.A. or W.A.)

Aside from the risks covered under F.P.A. condition as above, this insurance also coves partial loss of the insured goods caused by heavy weather, lightning, tsunami, earthquake and/or flood.

The difference between F.P.A. and W.P.A. is that the F.P.A. clause does not cover partial loss of nature of particular average, whereas the W.P.A. clause covers such losses when they exceed a prearranged percentage. This is the only difference between W.P.A. and F.P.A.O. Otherwise, the protection under the F.P.A. clause will be almost identical to that offered by the W.P.A. clause, because in the event of maritime accidents encountered in transit, such as stranding fire, explosion or collision, both clauses will cover particular average losses in full.

To be continued…

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