Salvage Loss

Salvage Loss in International Trade

Meaning of Salvage Loss, according to the Dictionary of International Trade (Global Negotiator): A method of insurance adjustment where the underwriter pays the difference between the amount of insurance and the net proceeds of the sale of damaged goods. It is sometimes incorrectly assumed that when damaged goods are sold to determine the extent of loss, the underwriter is obligated to pay the difference between the amount of insurance and the net proceeds of the sale. The salvage loss method is regularly used only if goods are justifiably sold short of destination.