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Legal Terms -constructive total loss
a partial loss of a ship or cargo that is handled as a *actual total loss for the purposes of a maritime insurance policy. This could happen if a real total loss seems certain (as when perishable cargo gets stuck forever) or if it can only be avoided by paying more than the ship or cargo are worth. Salvage operations costs are a crucial aspect to consider when evaluating the cost of repairs for this purpose, but general average payments by other insurers are not taken into account. A notification of *abandonment of the ship or cargo must be served to the underwriters by the insured. This is irreversible once approved by the underwriters and needs to be fulfilled unconditionally and within a reasonable amount of time after he learns of the loss. In exchange for all of his rights to the ship or cargo, the underwriters agree to indemnify him for a complete loss.
a partial loss of a ship or cargo that is handled as a *actual total loss for the purposes of a maritime insurance policy. This could happen if a real total loss seems certain (as when perishable cargo gets stuck forever) or if it can only be avoided by paying more than the ship or cargo are worth. Salvage operations costs are a crucial aspect to consider when evaluating the cost of repairs for this purpose, but general average payments by other insurers are not taken into account. A notification of *abandonment of the ship or cargo must be served to the underwriters by the insured. This is irreversible once approved by the underwriters and needs to be fulfilled unconditionally and within a reasonable amount of time after he learns of the loss. In exchange for all of his rights to the ship or cargo, the underwriters agree to indemnify him for a complete loss.
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