F.A.C. – A shipping term meaning “as fast as can”; that the vessel must be loaded or unloaded as fast as possible.

FACE AMOUNT – An American expression denoting the amount for which the Insurer is liable under the policy.

FACULTATIVE – A term meaning the “right of option” of an underwriter to decide (in insurance or reinsurance) whether or not to accept a risk.

FAILURE OF CONSIDERATION – Occurs when the subject matter insured or part thereof is not exposed to risk. For example, a policy is effected to cover a marine shipment of 100 boxes but only 80 boxes are sent. The Insured is entitled to a refund of premium on the 20 boxes that were not exposed to risk.

FAIR MARKET VALUE – The price that a willing buyer would pay a willing seller, neither being under any compulsion to sell or buy.

F.A.S. – A term of sale meaning “free alongside ship”. The seller is responsible for the goods and all charges until the goods are delivered alongside the overseas vessel to await loading.

FAULTY DESIGN – An extension of cover available under contractors all risks policies. Whilst the extension provides cover for loss or damage arising from faulty design, it does not cover the expense of repairing, modifying, replacing or renewing the part with the faulty design, nor any cost or expense incurred by betterment or alteration in design.

FEAR OF A PERIL – Insurers are liable for losses proximately caused by an insured peril. Fear of a peril does not constitute a peril so that Insurers are not liable for a loss caused by an uninsured peril, even though the loss would not have arisen but for fear of an insured peril.

FINANCIAL DEFAULT OF CARRIER – An exclusion clause in marine cargo insurance which relieves the insurer from liability where loss, damage or expense arises from insolvency or financial default of the owners, managers, charterers or operators of the vessel carrying the insured goods.

FIRE – Combustion sufficient to produce a spark, flame, or glow and which is hostile (as opposed to friendly – i.e., not in the place where it is intended to be, such as in a furnace.)

FIRE INSURANCE – Coverage for loss of or damage to a building and/or contents due to fire.

FIRE RESISTIVE CONSTRUCTION – A building which has exterior walls, floors, and roof constructed of masonry or other fire-resistive materials.

FIRE WASTE – The absolute economic loss of wealth to the community caused by fire.

FLAG OF CONVENIENCE – Where a ship registers with a flag of a country not requiring high standards of compliance to safety, inspections, surveys, etc. it is said to be registered with a ‘flag of convenience’.

FLASH POINT – The temperature at which a substance or the vapour therefrom will ignite. The lower the flash point the higher the fire risk.

FLAT CANCELLATION – Cancellation of an insurance outright from inception.

FLOATER POLICY – A policy under the terms of which protection follows moveable property, covering it wherever it may be.

FLOOD INSURANCE – A form of insurance designed to reimburse property owners from loss due to the defined peril of flood. Usually sold in connection with a government Flood Insurance plan.

FLOTSAM – Goods lost from a vessel which remains afloat.

F.O.B. – A term of sale meaning “free on board; the seller’s responsibility for the goods ceases as the goods are loaded onto the overseas vessel for carriage overseas.

FORCE MAJEURE – An act of God. Any occurrence completely beyond human control and which could not have been avoided by foresight. A superior power. Circumstances beyond one’s control. Example: an earthquake.

FORGERY – In general, any false writing with intent to defraud.

FORKLIFT – A motorised vehicle with forklike lifting apparatus, used for cargo handling.

FORM – An insurance policy itself or riders and endorsements attached to it.

FORM OF SUBROGATION – An authority signed by the Insured which enables the Insurer to pursue his subrogation rights without the necessity of proving his entitlement to the rights.

FORTUITOUS EVENT – An unforeseen accident; any loss or damage which is not an inevitability.

FORUM CONVENIENS – The country in which circumstances demand that a legal action should be founded.

FOUL BILL OF LADING – A bill of lading which has been qualified by the carrier to show that the goods were not sound when loaded. Usually termed a “dirty” bill of lading.

F.P.A. – “Free of particular average”. A term in marine insurance referring to a policy which does not cover particular average (i.e. partial) losses.

FRANCHISE – In marine insurance, an amount or percentage specified in the policy that must be reached before a claim is payable. Once the amount or percentage is attained the claim is payable in full.

FRAUD – Fraud by the Insured negates a contract of insurance and the Insurer is not liable to return any premium paid.

FREIGHT FORWARDER – One who represents an exporter in arranging overseas shipments.

FRONTING COMPANY – An Insurer who acts for other (re)insurers by issuing a policy in its own name thereby holding itself directly liable for claims to the insured, although the liability of the Company is reinsured 100% with other insurers.

FROZEN FOOD CLAUSES – A specialist form of clauses used in marine insurance to provide cover on shipments of all forms of frozen food, except frozen meat which has its own form of specific clauses.

FROZEN MEAT CLAUSES – Utilised in marine insurance for coverage on shipments of frozen meat. The clauses are not designed for the insurance of chilled, cooled or fresh meat, nor any frozen products other than meat.