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Actual Total Loss (ATL):

Actual total loss occurs when the goods are completely destroyed or lost in such a manner that they cannot be recovered or repaired. In essence, the goods are rendered entirely useless or inaccessible for their intended purpose. This could result from various circumstances such as natural disasters (e.g., earthquakes, floods), accidents (e.g., fire, explosion), or deliberate actions (e.g., piracy, theft). Once an actual total loss is confirmed, the title of the goods usually transfers to the insurer, and the exporter or importer may file an insurance claim to recover the value of the lost goods.

Constructive Total Loss (CTL):

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