|Total Loss (TL)|
May be Actual Total Loss, Constructive Total Loss, or Compromised (or Arranged) Total Loss.
- Actual Total Loss - Total loss of a vessel or cargo when the property is completely lost or destroyed due to one of the following:
- Physical Destruction - e.g. plywood being totally consumed by fire.
- Irretrievable Deprivement - the owner of the property is deprived of the use of the property even though it is still intact and undamaged; e.g. a shipment of silver ingots is lost overboard; even though they still exist and are undamaged at the bottom of the ocean, they are irretrievably lost.
- Loss of Specie - changes in the character of the property so that it ceases to be the thing shipped; e.g. bags of cement wetted by sea water and hardened into concrete.
- Vessel Lost - a vessel (and its cargo) is posted "missing" at Lloydâ€™s and is considered an actual total loss, even though there is no evidence of it sinking.
- Constructive Total Loss (CTL) - A vessel or cargo is so damaged that an actual total loss is inevitable, or the part or remnant remaining can only be recovered and repaired at a cost exceeding the insured value of the property.
- Compromised (or Arranged) Total Loss - A negotiated total loss settlement between the property owner and the insurance company under unusual circumstances, e.g. a vessel owner accepts a settlement of less than the face value of the hull policy and retains title to the vessel.