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Average Clauses (Particular Average Clauses)


The perils listed in the insurance policy establish the basic perils that are covered by a named peril policy, and a total loss due to any one of these perils is covered in full.

The various Average Clauses determine when PARTIAL LOSSES due to a named peril in the policy are covered.

The Average Clauses fall into two categories:

FPA (Free of Particular Average) and W A (With Average):

FPA - AC (Free of Particular Average - American Conditions) – Limits recovery of partial losses to those directly CAUSED BY the vessel stranding, sinking, burning, or being in collision with another vessel.

FPA - EC (Free of Particular Average - English Conditions) – Limits recovery of partial losses due to a named peril in the policy occurring on a voyage in which the vessel is stranded, sunk, burnt, or in collision with another vessel. Under F P A - E C, it is NOT NECESSARY that the actual damage be caused by the vessel stranding, sinking, burning, or being in collision, but only that one of these HAS OCCURRED sometime during the voyage to open up the FPA Warranty. Today these conditions are usually worded so that damages caused by collision are covered, but so that a collision does not open the FPA warranty. WA if amounting to 3% (With Average with a Franchise equal to 3% of the insured value ) – Limits recovery of partial losses due to a named peril in the policy to those reaching a Franchise (3% is usual for many commodities, but the Franchise can be any percentage of the insured value, or any amount agreed upon by the insurance company and the Assured). See "Franchise." The Clause can be written in a variety of ways, including:

  • With Average, if amounting to 3%.

  • With Particular Average, if amounting to 3%.

  • Particular Average Payable, if amounting to 3%.

  • Average Payable, if amounting to 3%.

  • To pay Particular Average, if amounting to 3%.

  • Subject to Particular Average, if amounting to 3%.

WA IRRESPECTIVE OF PERCENTAGE (With Average, No Franchise) - Allows full recovery of all partial losses due to a named peril in the policy. This clause can also be written in a variety of ways, as above, with the words "if amounting to 3%" replaced by "irrespective of percentage," or deleted entirely.
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