Legal Insight. Business Instinct.

Month: September 2019

General Article

What Is the Best Bankruptcy Petition for Businesses?

If you are looking to file for bankruptcy for the first time, then you will notice there are different chapters available. Chapter 7 remains the most popular, but others like Chapter 13 and 11 also exist. The bankruptcy petition you choose will significantly depend on your unique situations. As an individual, filing for bankruptcy may involve providing a myriad of financial documents relating to income, investments, assets, and benefits. If you are filing for bankruptcy as a business entity, your motivation may stem from a different set of concerns. Here is a brief look at the available bankruptcy petitions and the best choice for businesses.

Types of bankruptcy petitions

As aforementioned, there are three main types of bankruptcy petitions (7, 11, and 13). Each chapter has its unique benefits and shortcomings as follows:

1. Chapter 7 – Liquidation Bankruptcy

This is the most popular bankruptcy petition most people file. It can help you get rid of most types of debts, including unsecured credit card and medical bill debts. Anyone (individuals, married couples, groups, and companies) can file for Chapter 7 bankruptcy provided they are eligible. Chapter 7 suits you if you do not own any substantial equity to give up in exchange for the debt. Qualifiers must also pass the “means test,” which determines if you are eligible for this type of bankruptcy. If you do not pass the test, your other option is Chapter 13.

2. Chapter 11 – Commercial Bankruptcy

Chapter 11 bankruptcy suits commercial entities, particularly businesses including corporations, sole proprietorships, and partnerships. In the case of a corporation, the stakeholders’ assets are not affected apart from the equity amount they invested in the corporation. A sole proprietorship does not make this distinction, so the owner’s assets may be reoccupied. Partnerships work in the same way as corporations, but personal assets may sometimes be used to pay part of the debt owed to the creditor.

3. Chapter 13 – Repayment Bankruptcy

This bankruptcy allows the debtor to reorganize their debt and enter a new interest-free agreement for repaying the owed amount. Chapter 13 bankruptcy may involve increasing the duration for paying the debt, removing any interests, and lowering the monthly installments to manageable amounts. If you qualify for Chapter 13 bankruptcy, the court will issue a statement to protect you from being pursued any further by debtors.

4.Best bankruptcy petition for businesses

Chapter 11 is the ideal bankruptcy for businesses and organizations. Its design covers the needs of different types of companies, including corporations, partnerships, and sole proprietorships. A business owner can also file for Chapter 13 bankruptcy to enter a new reorganized repayment plan for their debt. Although business entities can file for Chapter 7, some areas are not adequately covered.


Finding the best bankruptcy petition for your business is a crucial process, especially if you want to salvage the venture moving forward. Bankruptcy status can significantly tarnish your image and credibility among both customers and investors. It is therefore essential to find highly experienced attorneys that can ensure you get the best agreement. This will increase your chances of keeping the business operational and recovering from bankruptcy.…

General Article

What are the things that a professional indemnity insurance covers?


When you are on duty and professionally at work, there might be cases when you commit errors. The errors can be caused due to some mishap, your negligence, lack of concentration, etc. When you do commit mistakes at work, you are bound to pay the price for it. In case your mistakes affect the client or any third party, they will be looking forward to file a complaint against you in order to get you sued. This is when you are in dire need of professional indemnity insurance.

This insurance will act as a perfect cover up for your mistakes and will help you recover from any financial cost or legal fee that you may have had to pay. There are certain scenarios that the professional indemnity insurance covers and some that it doesn’t. You can learn more about them on our website, https://www.simplybusiness.co.uk/insurance/professional-indemnity/ but first, let’s have a go through at some cases;

Will PI insurance cover bodily damage?

Yes, PI insurance does cover bodily damage under the condition that the damage was done by the business or an employee of the business while at work. Any such mishaps or accidents that cause the clients to suffer from any kind of property damage or financial losses, the insurance will compensate them for it. The only condition being that the error must be caused by you while you are on duty.

Will PI insurance cover consequential losses?

Consequential losses are those losses that are suffered by the customers due to the business’ guidance or suggestions causing them financial losses. Consequential losses are very sensitive in nature and hence they must be dealt accordingly. Some PI policies do include consequential losses; however, they come up with certain exclusions that the business should be mindful of before purchasing the insurance.

Will PI insurance cover contractors?

Although contractors are not considered to be the employees of an organization, one must make sure that they are measured as one. Since PI insurance only covers up the mistakes made by the business’ employees, the contractors won’t be a part of it. However, in case the business portrays them as being part of the business, they will be considered appropriately then. However, a business needs to ensure that the insurers are accepting this as it can cause arguments in the future.

Will PI insurance cover defamation?

Before answering this, let us first understand what is defamation in the context of PI insurance. Defamation are basically false accusations made by someone that are aimed to affect someone’s reputation negatively. Although the law is strict in such cases, any attempt made to defame any person shall be held liable. However, usually PI insurances cover only those defamations that have been done unintentionally. It’s better to confirm this before you buy the policy.

Will PI insurance cover budget extension / breach of contract?

Yes, in case you were not able to deliver at your job in the right manner and the client has sued you for it, the PI insurance will compensate your client for the losses they have incurred. Whether they have gone out of budget or have not been satisfied by your service, your PI insurance will surely cover up for you.