Total Loss Only Insurance (TLO)

Definition - What does Total Loss Only Insurance (TLO) mean?

Total loss only insurance is coverage that comes into effect only if the insured property experiences a complete loss. It is often used in the context of marine insurance and represents a much cheaper option than regular hull insurance. It can prevent shipping companies from having to pay for significant damages in the event of major catastrophes.

Insuranceopedia explains Total Loss Only Insurance (TLO)

Occasionally, ships get lost at sea and their cargo is lost with them. Otherwise, accidents or other unfortunate events on board can entirely destroy the cargo or the ship. An example would be a fire on board that consumes the cargo.

Total losses are rare, however, and thus, total loss only insurance is much less expensive than other forms of insurance. However, in the event of a total loss, without insurance, it can translate to millions of dollars’ worth of losses that a company could be responsible for.

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