Abandonment And Salvage

DEFINITION of 'Abandonment And Salvage'

An expression that describes the forfeiture of property and the ensuing claim over that property by a second party. Abandonment and salvage can be added as a clause in an insurance contract; this gives the insurance company the ability to accept the abandoned property. Abandonment must be expressed with intent. The potential financial rewards mean that salvage rights are sometimes legally contested by several parties.

BREAKING DOWN 'Abandonment And Salvage'

Salvage and abandonment clauses are usually found in marine insurance contracts. For example, if a vessel sinks and the owner thinks it would be too expensive to reclaim the ship, he or she could declare it abandoned. The insurance company could then claim ownership and salvage rights to the sunken ship. Advancements in technology have made it possible and financially viable to reach previously inaccessible wrecks, resulting in increased salvage claims.