By Losses in the marine environment can take many forms, and it can be challenging to quantify them. Even if you have a marine insurance policy that helps you recover financially from losses, it is still in your ideal interest to know the various kinds of losses that can occur to determine how to proceed with claim settlement.
This article will take you through the various categories of marine losses to provide you with an all-encompassing parameter to help you retrieve the total amount from different types of losses.
There are primarily two types of marine losses.
- Total loss:
- A loss is considered a total loss when the value of the insured goods has dropped by one hundred percent (or nearly one hundred percent).
- Loss classified as partial:
- With commercial insurance, when only a portion of the insured goods are destroyed or damaged, the loss is considered partial.
- Expenses related to operations and postoperative care
Additional categories and subgroups
There is also the subcategory of partial losses in addition to total losses. A total loss can be further broken down into the following categories:
- Actual loss: Cargo is considered to have suffered a substantial loss when it is damaged to the point where there is no longer any hope of reclaiming the goods. To put it another way, in the event of an actual total loss, it does not matter if the goods are salvaged because they are of no use.
- Constructive loss: In marine insurance or commercial vehicle insurance, the damage is said to be a constructive loss when the cargo is damaged to the point where the cost of repairing and reconditioning the cargo would be higher than the cargo’s total value.
- Expenses related to operations and postoperative care
The following are examples of subcategories of partial losses:
- Partial particular loss:
When goods sustain only some of the damage that could have been avoided, this type of loss is referred to as a particular partial loss. The category of specific partial loss is further broken down into the following categories:
- Complete destruction of a component of a good: This method is utilised to compute the actual loss amount whenever only a portion of a consignment is found to have been lost.
- The arrival of goods that are damaged: If the goods arrive at the destination in a damaged condition, then an attempt is made to calculate the specified percentage of the goods’ depreciated value.
- General average loss:
In commercial insurance or commercial vehicle insurance renewal, a situation is considered to have a general average loss if the goods were damaged on purpose to avoid some danger.
Suppose you are supplying chemicals. For instance, some had to be discarded because of a leak that ran the risk of the ship becoming contaminated. In that case, this falls under the category of a general average loss.
To sum everything up –
Regardless of the type of marine insurance policy purchased—whether it was marine cargo insurance, inland marine insurance, or some other kind—the insurance company would settle the losses and compensate for the same based on the category of sustained losses.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
