When your character dies, you will be prompted to either release to a Wayshrine or revive on the spot where your character died.Releasing to a Wayshrine will resurrect your character at the nearest Wayshrine, but your armor will suffer a durability loss from the failed encounter.
Reviving requires a full Soul Gem, and it will bring your character back to life in the same location where you died. Your armor will still suffer durability loss from the failed encounter upon reviving.
Restoring Durability
When you die, your armor will lose Durability. If your armor's Durability drops to zero, it will no longer offer your character any protection.To restore Durability to an item you must get it repaired by a merchant. You can also purchase Repair Kits to carry with you into combat, in case a merchant is not conveniently available. To use a Repair Kit, simply right-click a damaged item and select "Repair."