Written evidence of an approved credit limit which forms part of the policy.
Limited Liability Company
Limited companies exist in their own right. This means the company’s finances are separate from the personal finances of their owners. Shareholders may be individuals or other companies. They are not responsible for the company’s debts unless they have given guarantees – for example, a bank loan. However, they may lose the money they have invested in the company if it fails.
Liquidation – Insolvency Practitioner
The business is wound up, maximising asset realisation to pay the Liquidator’s fees. Any surplus is put into the estate. Unsecured creditors claims are assessed and admitted to rank in the estate, to share out any final value, by dividend share. Payouts are rarely above single figures in percentage terms.
Liquidation – Official Receiver (OR)
Where there are no surpluses, the Government Agency is used to wind up a business. Dividends are not available through this path and the OR will only acknowledge receipt of a claim in the estate. They will not comment on it’s value.
Losses Occurring Policy
A policy under which cover is conditional on the date of the cause of loss occurring within the policy period. Essentially cover is provided for deliveries or despatches made in the policy period. There is no pre-policy cover but there is a run-off liability at the end of the policy.
Losses Arising Policy
A policy under which cover is conditional on the date of the cause of loss arising within the policy period. Cover is provided for insolvencies only during the policy period. This means that there could be pre-policy debt which is covered, on existing contracts but the liability shuts off immediately on policy termination.