Looking at risks covered under these various policy forms, first there is the actual Total Loss situation. This takes place when the ship is destroyed or the owner is irretrievably deprived of the use of the ship. There are, however, occasions when the ship is not actually destroyed or lost but where she becomes so badly damaged that the cost of repair exceeds her insured value. In such circumstances the vessel may be declared a Constructive Total Loss (CTL). This must be done clearly in full consultation and agreement with the underwriter in which event the owners would be obliged to tender Notice of Abandonment of the vessel to the underwriters involved. In this event what is left of the ship becomes the property of the underwriters. The policy wording will normally allow for the insured value of the ship to be substituted for the repair value in order to determine when the vessel can be considered a CTL. Particular Average means a Partial Loss caused by a peril insured against as distinct from Total Loss or General Average. The word ‘Average’ does not have its every day meaning in this context and its origins are somewhat obscure (although perhaps a little easier to understand when we come to General Average later in the lesson). Particular Average (PA) are the most common type of claims under a marine insurance policy and occur when a ship sustains damage (as a result of one of the perils insured against) where the cost of repairs is less than the level of indemnity (value) allowed for in the policy. The perils insured against in the policy are clearly laid down, as can be seen, for instance, under Clause 2. Additionally, most owners elect to extend their policy by means of an Additional Perils Clause (Clause 44) which gives them greater flexibility and scope to submit claims. This was formerly known as the “Inchmaree Clause” and owes its name to a case which went to the House of Lords in 1887 when it was held that damage done to the s.s. ‘Inchmaree’ due to inadvertence on the part of a member of the crew, (the donkey boiler blew apart) was not a peril insured against under the normal marine insurance policy of the day. Under such Additional Perils clauses it is sufficient for the owner to demonstrate that the loss or damage was caused by an accident during the currency of the policy. The insurers are protected by the proviso that the loss must not have resulted from want of due diligence by the assured, owners or managers.