“With Average” coverage, also known as “With Particular Average” or simply “WA” in insurance terminology, is a specific clause in marine cargo insurance policies. This clause defines a particular kind of coverage related to damage or loss of cargo during its transportation by sea. “With Average” insurance is a bit different from “All Risk” coverage. Here’s what you need to know about “With Average” coverage:

  1. Partial Loss Coverage: “With Average” coverage is designed to provide insurance protection against partial losses or damage to cargo during its ocean voyage. Partial loss means that only a portion of the cargo is damaged or lost, rather than a total loss of the entire shipment.
  2. General and Particular Average: “With Average” coverage is associated with two key terms used in marine insurance:
    • General Average: This is a principle in marine insurance where all parties involved in a sea voyage (shipowner, cargo owner, etc.) proportionally share the losses incurred due to a deliberate sacrifice or extraordinary expenses made to save the ship and cargo from a common maritime peril (e.g., jettisoning cargo to lighten a ship during a storm). “With Average” coverage can be relevant in general average situations.
    • Particular Average: This refers to losses that are specific to a particular interest, such as the cargo owner’s losses, and are not shared with other parties. “With Average” insurance covers these particular average losses, including damage or losses that are not part of a general average event.
  3. Named Perils Coverage: Unlike “All Risk” coverage, which is broader and covers a wide range of risks unless specifically excluded, “With Average” coverage typically only covers specific named perils or risks. These named perils are usually outlined in the insurance policy and may include common maritime risks like fire, collision, theft, and damage from natural events.
  4. Exclusions and Limitations: “With Average” policies may still have exclusions and limitations, so it’s essential for policyholders to carefully review their policies to understand what is covered and what is not.
  5. Customization: Policyholders may have the option to customize their “With Average” policies by adding endorsements or riders to extend coverage to specific risks or to increase coverage limits.
  6. Specific to Marine Cargo: “With Average” coverage is primarily used in marine cargo insurance to protect cargo owners against partial losses during the course of an ocean voyage. It ensures that cargo owners are compensated for losses that are not part of general average events.
  7. Applicable to International Trade: This type of coverage is particularly important for businesses engaged in international trade who transport goods via sea, as it provides protection against common risks in maritime transportation.

In summary, “With Average” coverage is a type of insurance protection specific to marine cargo. It is designed to cover partial losses or damage to cargo during its voyage by sea and is particularly relevant in situations where general average principles may apply, as it helps cargo owners recover their losses in such cases. It’s important for policyholders to understand the named perils, exclusions, and limitations outlined in their “With Average” policies to ensure they have the coverage they need for their specific cargo shipments.