Liquidation bonds guarantee the proper administration & accounting for estates under administration.
What are liquidation bonds?
A liquidation bond is a bond of security or a suretyship. It guarantees that the liquidator or trustee will provide proper administration and accounting for all funds and property of the company or estate under their administration.
Why do you need a liquidation or insolvency bond?
Both liquidation & sequestration involve the process of converting the assets of the company or estate into cash in order to to pay administration costs & creditors with proved claims. Once a company or estate is liquidated or sequestrated they no longer have the power to dispose of their own property. Their powers are thus given to the liquidator or trustee which is appointed by the Master of the High Court.
Both the provisional and final liquidators & trustees are required by law to provide security to the Master of the High Court for their performance whilst in office.
Frequently Asked Questions
How do the claims work?
The only party that may call up a Liquidation Bond is the Master of the High Court. As with all suretyships, should the liquidator/trustee default then the Surety will be called up & the Insurer will make good any loss arising from the default.
How much do Liquidation Bonds cost?
Both the rate & the wording of the bond are set by the Master of the High Court. Currently the annual rate on Liquidation Bonds is 0,5% (excl. VAT) on the asset value of the estate.
Can premiums be paid monthly?
No, the Master of the High Court has set this as an annual rate. All premiums for Liquidation Bonds are paid annually. The bond renews annually at the same rate or a reduced rate, depending on whether assets have been realised.
How can I avoid a claim?
Claims can easily be avoided through:
- Diligent, honest & fair administration of the Estate.
- Delivering best practices in your industry.
- Keeping abreast of regulations and legislation.
What are the requirements for getting cover?
- Membership with an an insolvency association (e.g. SARIPA) or experience as a liquidator.
- A listing on the Master of the High Court’s National list of Liquidators.
- A Professional Indemnity Insurance policy whcih is active throughout the duration of bond.
Why Choose Us
With our comprehensive offering, we provide appropriate and affordable Surety Bonds for professionals in their respective fields.
As a professional, you need an insurance partner who understands your business risks. Our experienced risk professionals offer expert advice, friendly service and bonds at competitive rates.
How to Get Covered
Complete the short questionnaire and provide us with any relevant details regarding the bond you require.
One of our expert risk professionals will call you to discuss the cover available for you and provide you with any advice you might need.
We'll provide you with a simple, hasslefree quotation for your consideration.
Send us you quote acceptance form and we'll get your bond issued within 24 hours.
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