Total Loss
A total loss occurs when goods are entirely lost or so damaged that they no longer are the thing insured, called an actual total loss. There is also a constructive total loss, where the cost of saving or repairing the goods would exceed their value afterwards, so they are treated as totally lost. Examples are a container lost overboard or a frozen load ruined by a failed reefer. Total loss claims are usually paid up to the insured value.
Related terms
- Insured Value
Insured value is the amount agreed in the policy as the basis for indemnity.
- Particular Average
Particular average is a partial loss that affects only a particular interest and is not shared, such as some cartons damaged by seawater or crushed during discharge.
- General Average (GA)
General average is the maritime law principle that an extraordinary sacrifice or expense, intentionally made to save ship and cargo from a common danger, is shared by all parties…
- Reefer Container
A reefer is an insulated container with its own refrigeration unit for frozen or chilled cargo such as fish, meat and fruit.