A type of marine insurance by which a ship is insured whist it is in the confines of a specified port area. An alternative form of cover allows the ship to navigate outside the port area.
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CONSTRUCTIVE TOTAL LOSS
In marine insurance, the Insured has the right to abandon the Insured property to the Insurer and claim a constructive total loss where, because of the operation of an Insured peril, (a) the Insured is deprived of the Insured property and is unlikely to recover it, or (b) an actual total loss appears to be inevitable, or (c) in the case of a vessel – the estimated costs of recovery and repair would exceed the repaired value, or (d) in the case of cargo – the estimated costs of recovery, reconditioning and forwarding to destination would exceed the repaired value (see ‘Notice of Abandonment’).