Marine loss. A loss may be total or partial. Any loss other than a total loss is a partial loss. “Partial loss” covers “particular average” and “general average”.
A total loss may be an actual total loss (ATL) or a constructive total loss (CTL). Unless a different interpretation is placed upon the terms of the policy, insurance against total loss includes a constructive as well as an actual total loss.
There is an actual total loss:
(a) when a ship is destroyed or damaged to such an extent that it is beyond recognition of that originally insured;
(b) when the assured is irretrievably deprived of possession of the ship.
There is a constructive total loss:
(a) when a ship is reasonably damaged on account of its actual total loss appearing to be unavoidable;
(b) when the ship could not be preserved from actual total loss without an expenditure exceeding the value if the expenditure were incurred;
(c) when the ship is so damaged that the cost of repairs would exceed the value of the ship when repaired.
When there is a constructive total loss, the assured may either treat the loss as a partial loss or abandon the ship to the insurer and treat the loss as if it were an actual total loss. In the latter case the assured must give notice of abandonment. If he fails to do so the loss can only be treated as a partial loss. (See also Abandonment).
A “total loss” can also be presumed if a vessel concerned in the adventure is missing and after a reasonable interval no news of her is received. This may be called “Presumed total loss” or PTL.