Definition of Abandonment clause:
The abandonment clause typically comes into play with marine property insurance, such as boats or watercraft. If a property owner's ship is sunk or lost at sea, the abandonment clause affords the owner the right to essentially "give up" on finding or recovering his or her property and subsequently collect a full insurance settlement from the insurer.
An abandonment clause in a property insurance contract, under certain circumstances, permits the property owner to abandon lost or damaged property and still claim a full settlement amount. If the insured party's property cannot be recovered, or the cost to recover or repair it is more than its total value, it can be abandoned, and the insured party is entitled to a full settlement amount.
A statement in a contract that details consequences and outcomes that will transpire in the event that one or both of the parties abandon their responsibility to complete the project. Often the amount of completed work is given to another contractor and the party who abandoned the job does not receive any compensation.
Meaning of Abandonment clause & Abandonment clause Definition